Why DigitalOcean Holdings (DOCN) Is Up 6.5% After Expanding AI Partnerships With OpenAI and NVIDIA

• At its recent Deploy London conference, DigitalOcean announced a major expansion of its AI Ecosystem and formally introduced the DigitalOcean AI Partner Program, offering customers new integrations and access to leading AI models and hardware from companies like OpenAI, Meta, AMD, and NVIDIA.
• This move aims to create a comprehensive, flexible platform for AI-native startups and digital native enterprises, strengthening DigitalOcean's position as an enabler for next-generation AI application development through unified tooling and developer-focused partnerships.
• We'll explore how DigitalOcean's expanded AI partnerships and developer ecosystem could impact its growth outlook and investment narrative.

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DigitalOcean Holdings Investment Narrative Recap

To own shares in DigitalOcean, you need to believe in its ability to capture a meaningful share of the next wave of cloud and AI platform growth, particularly with digital native enterprises and AI-native customers. The recent expansion of the AI Ecosystem and Partner Program is positive for broadening DigitalOcean’s AI platform appeal, but its short-term impact on revenue growth and the company’s biggest near-term catalyst, accelerated adoption among AI-first developers, remains to be seen, while the most important risk continues to be intense hyperscaler competition and the challenge of scaling enterprise sales efficiently.

Among recent announcements, the partnership with Laravel, which brought Laravel VPS to over 1 million developers, stands out as building stickier integrations in the developer community. This move complements the new AI initiatives, highlighting a consistent focus on lowering barriers to cloud and AI adoption and potentially boosting customer retention and migration from competitors as a growth lever.

Yet while these platform expansions illustrate upside, investors should also be mindful that, unlike larger rivals, DigitalOcean still faces the risk of...

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

DigitalOcean Holdings' outlook anticipates $1.3 billion in revenue and $182.0 million in earnings by 2028. This is based on analysts projecting 14.6% annual revenue growth and a $55.6 million increase in earnings from the current $126.4 million.

Uncover how DigitalOcean Holdings' forecasts yield a $41.60 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Eleven members of the Simply Wall St Community estimate DigitalOcean’s fair value between US$24.42 and US$50, reflecting considerable differences in outlook. Ongoing competition from major cloud platforms could have a significant impact on the company’s ability to sustain momentum, so it pays to consider many views.

Explore 11 other fair value estimates on DigitalOcean Holdings - why the stock might be worth as much as 34% 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.

• A great starting point for your DigitalOcean Holdings research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.
• Our free DigitalOcean Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate DigitalOcean Holdings' overall financial health at a glance.

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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.

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