QM · rank #5 · 2026-10-22
DOCN
NYSE · $11.60B (USD)
The exact numbers the algorithm saw.
| Momentum 12-1 Return from 12 months ago to 1 month ago. | +287.17% |
|---|---|
| ROE TTM Return on equity, trailing 12 months. | +62.3% |
| Profit margin Net profit margin, trailing 12 months. | +23.3% |
| Market cap (USD) Size filter: > $500M required. | $11.60B |
| Anchor (recent) Close on 2026-09-22 | $146.00 |
| Anchor (far) Close on 2025-09-22 | $37.71 |
The AI research card
Independent qualitative review of each pick before the order is placed. On the rare day the research service is unavailable, the paper book trades on the quant ranking alone and no card appears here.
Summary
DigitalOcean is a developer-focused cloud platform that has rapidly pivoted to AI-native infrastructure, offering GPU/CPU compute, inference, managed-agent orchestration, and data services to over 680,000 customers.
Rationale
The quality_momentum signal is reinforced by 29% YoY revenue growth accelerating toward a guided 35% Q4 exit rate, a 40% adjusted EBITDA margin, 62% ROE, and a 12x YoY RPO surge to $894M that provides durable revenue visibility underpinning the momentum leg.
Material risks
- 1Hyperscalers internalizing inference and agent-orchestration capabilities could commoditize DOCN's core AI differentiation, as the moat rests on simplicity and pricing rather than proprietary supply or patents — the most concrete disqualifier for sustained momentum.
- 2$921M in combined debt and finance-lease obligations against $61M quarterly free cash flow constrains balance-sheet flexibility if AI demand or utilization rates disappoint during the ongoing capacity build-out.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 3 of 3 voted to proceed.