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    DigitalOcean (DOCN) Is Up 10.7% After Raising 2025 Outlook On Expanded AI Partnership

    Simply Wall St·01/07/2026 14:30:24
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    • DigitalOcean Holdings recently expanded its AI partnerships through a collaboration with Persistent Systems to build cost-effective infrastructure for enterprise AI workloads, while also raising its full-year 2025 revenue and earnings guidance tied to growing adoption of its Gradient AI Agentic Cloud platform.
    • This combination of deeper AI integration and a higher financial outlook highlights how DigitalOcean is positioning its cloud offering as a lower-cost, developer-friendly alternative for running AI applications amid rising infrastructure and security concerns.
    • We’ll now examine how the expanded Persistent Systems AI partnership and upgraded outlook could influence DigitalOcean’s broader investment narrative.

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    DigitalOcean Holdings Investment Narrative Recap

    To own DigitalOcean, you need to believe it can carve out a durable niche as a simpler, lower-cost cloud platform for developers and smaller enterprises, while scaling newer AI services without eroding profitability. The expanded Persistent Systems partnership and raised 2025 guidance support the near term AI adoption catalyst, but they do not eliminate key risks around customer retention, heavier AI infrastructure spending, and competition from larger cloud providers.

    The new multi year AI collaboration with Persistent Systems, where DigitalOcean powers the SASVA platform on its Gradient AI Agentic Cloud and GPU stack, ties directly into the company’s push to grow AI workloads. This deal reinforces AI as a core growth angle while also testing DigitalOcean’s ability to manage capital intensive GPU investments, which could influence both margins and how investors view the sustainability of its AI driven expansion.

    But investors should also be aware that DigitalOcean’s need for heavy AI infrastructure investment could...

    Read the full narrative on DigitalOcean Holdings (it's free!)

    DigitalOcean Holdings' narrative projects $1.3 billion revenue and $182.0 million earnings by 2028. This requires 14.6% yearly revenue growth and about a $55.6 million earnings increase from $126.4 million today.

    Uncover how DigitalOcean Holdings' forecasts yield a $54.00 fair value, in line with its current price.

    Exploring Other Perspectives

    DOCN 1-Year Stock Price Chart
    DOCN 1-Year Stock Price Chart

    Fourteen fair value estimates from the Simply Wall St Community range widely, from US$22.95 to US$65 per share, underscoring how far apart individual views can be. When you weigh those against DigitalOcean’s heavier AI infrastructure needs and execution risks around new enterprise focused deals, it becomes even more important to compare several viewpoints before forming your own expectations for the business.

    Explore 14 other fair value estimates on DigitalOcean Holdings - why the stock might be worth as much as 20% more than the current price!

    Build Your Own DigitalOcean Holdings Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.