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DigitalOcean’s DOCN shares have returned 56.8% in the past three months compared with the Zacks Computer & Technology sector’s increase of 18.2% over the same time frame. The uptick can be attributed to DOCN’s expanding portfolio and strong partner base in its cloud computing sector. DOCN’s success is highlighted by the completion of the training for 4,000 builders and scalers on its platform in the third quarter, contributing to a total customer base of more than 154,000. Customers spending over $50 per month contribute 86% of overall revenue. The recent virtualized availability of NVIDIA H100 Tensor Core GPUs on its Paperspace platform reflects the increasing demand for accelerated AI computing, with NVIDIA H100 GPUs offering exceptional performance to reduce training iteration periods and enhance model inference response times.

DigitalOcean recently expanded its portfolio with NVIDIA NVDA, further solidifying its commitment to providing innovative infrastructure for startups and growing digital businesses. A noteworthy move that contributed to DigitalOcean’s positive momentum was the acquisition of Paperspace, a company specializing in AI/ML capabilities, expanding its market opportunities. The integration of NVIDIA H100 GPUs, coupled with enhanced features like a redesigned container registry and fortified deployment endpoints, positions DigitalOcean as a crucial player in providing innovative infrastructure to develop the next generation of AI/ML applications.

The latest move by DigitalOcean in integrating NVIDIA H100 Tensor Core GPUs on its Paperspace platform is in sync with the growing demand for accelerated AI computing, offering startups a powerful and cost-effective solution for advanced AI/ML development. During the third quarter, DOCN further highlighted the addition of Nomic, a company founded in 2022 focusing on AI explainability, to the Paperspace platform, with Nomic selecting DigitalOcean for High Performance Compute, intuitive software and reliable customer support. In November, DigitalOcean announced that 78% of organizations plan to increase AI/ML usage, 37% will boost cybersecurity spending, and 35% adopt multi-cloud strategies, emphasizing diversification in cloud infrastructure among SMBs and startups. DigitalOcean continued to expand its offerings with the launch of Scalable Storage for PostgreSQL and MySQL Managed Databases. This innovative solution allows SMBs to incrementally add affordable disk storage without altering compute resources, ensuring flexible scaling and optimized costs for the database needs.

DOCN expects revenues of $178 million for fourth-quarter 2023, with non-GAAP earnings expected in the range of 36-37 cents per share. For 2023, DOCN expects revenues of $690 million, indicating 19.71% growth year over year. Currently, DOCN carries a Zacks Rank #4 (Sell). Blackline BL and Itron ITRI are better-ranked stocks, each sporting a Zacks Rank #1 (Strong Buy). BL and ITRI shares have returned 8.7% and 1.9%, respectively, in the past six months. Long-term earnings growth rates for Blackline and Itron are 50.56% and 23%, respectively.



Read more: DigitalOcean’s (DOCN) Expanding Portfolio Strengthens Prospect