DigitalOcean stock surges 240% in 2026 as AI expansion outpaces Nvidia's 15% gain; Wall Street sees upside despite high valuation

DigitalOcean reported first-quarter revenue of $258 million, up 22%, driven by strong sales among AI customers. The company revised 2026 revenue guidance to 26% growth (from a previous 30% forecast) after securing 60 megawatts of additional compute capacity.

DigitalOcean's AI-Native Cloud platform simplifies cloud computing for small and medium-sized businesses by combining servers and software for agentic workloads (AI systems that make decisions and execute tasks autonomously). CEO Paddy Srinivasan called it the "most significant product launch" in company history.

Nvidia remains the dominant AI infrastructure supplier, with nearly 90% market share in AI accelerators and over 40% of AI data center spending. The company's Vera Rubin platform, pairing Rubin GPUs with Vera CPUs, delivers up to 35 times more throughput per watt than the previous Blackwell generation when paired with Groq 3 LPUs (language processing units that speed up inference).

DigitalOcean trades at 81 times adjusted earnings with Wall Street estimates of 23% annual earnings growth through 2028. The median analyst price target of $177 per share implies 8% upside from the current share price of $164.