Canaccord Genuity on Thursday raised its price target for DigitalOcean (NYSE: DOCN) to $80 from $65 while keeping a Buy rating, pointing to what the firm describes as underappreciated revenue potential tied to capacity additions and the company’s expanding role in the AI ecosystem.
The stock was trading at $68.18, close to a 52-week high of $70.43, after a notable 126% rally over the past six months.
Canaccord’s note comes ahead of DigitalOcean’s fourth-quarter earnings release, scheduled to arrive in four days, and a 90-minute investor update call planned for Tuesday morning. The firm said the investor session likely signals management’s intention to refresh its longer-term growth outlook.
Analyst David Hynes Jr. emphasized that the revenue opportunity from an additional 30 megawatts of capacity expected to come online this year is not fully reflected in current market expectations. Using the firm’s base case estimates, the new price target equates to 7.7 times enterprise value to calendar year 2027 estimated sales.
Hynes also noted that, given the pace of expected growth in fiscal 2026 and extrapolating that cadence into fiscal 2027, DigitalOcean could be a company that registers accelerating revenue for four consecutive years.
Separately, research analysis referenced in the coverage indicates the stock currently appears overvalued relative to its calculated Fair Value, even as DigitalOcean retains a strong financial health score of 3.34, labeled "GREAT."
Several other firms have adjusted their views on DigitalOcean in recent weeks. Cantor Fitzgerald upgraded the stock from Neutral to Overweight and raised its price objective to $68, citing an improved growth outlook and an acceleration in revenue now expected by 2026. Bank of America Securities lifted its target to $72 and maintained a Buy rating, pointing to the growing opportunity presented by agentic AI assistants such as Clawdbot.
Citizens reiterated a Market Outperform rating with a $60 price target following additional market analysis.
Management changes and product performance updates have accompanied the shifts in broker sentiment. DigitalOcean named Vinay Kumar, formerly of Oracle Cloud, as Chief Product and Technology Officer to oversee product strategy and cloud operations. On the product front, the company reported that its Inference Cloud Platform has doubled throughput for Character.ai, a development the company said improves performance and reduces costs.
Taken together, the combination of capacity growth, executive hiring, and reported platform performance improvements has drawn increased broker and investor attention. Canaccord’s valuation approach and the recent string of analyst actions underscore how market expectations are shifting as DigitalOcean positions itself within AI-related cloud services.
Summary
Canaccord raised its DigitalOcean price target to $80 from $65, keeping a Buy rating. The firm cites underappreciated revenue from an additional 30 megawatts of capacity and expects management to update longer-term growth guidance at an upcoming investor call. Other brokers have also nudged up ratings and targets amid product and personnel developments.
Key points
- Canaccord raises DigitalOcean price target to $80 and maintains Buy.
- Stock trades near its 52-week high after a 126% increase over six months; trading price cited at $68.18.
- Additional 30 megawatts of capacity coming online this year seen as a material revenue driver; investor update expected to address longer-term outlook.
Risks and uncertainties
- Valuation concerns - analysis indicates the stock appears overvalued versus Fair Value, which could affect investor expectations and share performance.
- Execution risk around capacity ramp - the revenue benefit tied to the additional 30 megawatts depends on successful deployment and customer uptake.
- Market reception to guidance - the forthcoming investor update and fourth-quarter results represent near-term catalysts that could create volatility depending on management’s messaging.