Cloud computing platforms have become essential for businesses looking to thrive in the digital age. These platforms offer a range of services, from basic data storage to advanced software development solutions. In recent years, cloud providers have also begun offering products and services to support artificial intelligence (AI) development and deployment.
While tech giants like Amazon and Microsoft dominate the cloud industry, a smaller player called DigitalOcean is making waves. Valued at $5.7 billion, DigitalOcean caters exclusively to small and mid-sized businesses (SMBs), providing cloud services as well as a growing portfolio of AI services.
DigitalOcean’s AI revenue has seen significant growth, doubling in each of its last five reported quarters. The company is set to release its fourth-quarter operating results on February 24, with expectations of continued growth. The stock has already seen a 27% increase in 2026, and the upcoming report is expected to drive further gains.
Unlike larger cloud providers that target high-spending customers, DigitalOcean focuses on personalized service, transparent pricing, and user-friendly interfaces tailored to SMBs. This approach has resonated with start-ups and small enterprises with limited resources.
DigitalOcean’s AI services are designed to be affordable for businesses of all sizes. The company operates data centers equipped with advanced chips from suppliers like Nvidia and Advanced Micro Devices, allowing customers to scale up their AI capabilities as needed. Compared to larger providers, DigitalOcean claims to offer significantly lower prices for fractional capacity.
One of DigitalOcean’s key offerings is Gradient, an AI platform that enables SMBs to access cutting-edge AI models and accelerate software development. The platform also helps businesses create and deploy AI agents, a potential growth area in the future.
According to DigitalOcean’s “Currents” survey, SMBs that have deployed AI agents have experienced time savings and unlocked new business capabilities. A significant number of SMBs plan to start using AI agents in 2026, positioning DigitalOcean to support them on their AI journey.
In terms of financial performance, DigitalOcean reported $659 million in total revenue for the first three quarters of 2025, marking a 14.5% year-over-year increase. The company’s AI revenue has been a key driver of growth, doubling year over year in each of the last five quarters.
Despite the stock’s impressive performance, DigitalOcean remains attractively valued with a price-to-sales ratio of 7.2 and a price-to-earnings ratio of 24.9. The upcoming earnings report could be a catalyst for further upside, especially if AI revenue continues to grow as expected.
In conclusion, DigitalOcean’s focus on SMBs, affordable AI services, and strong financial performance position the company for continued success in the cloud and AI industries. Investors should keep an eye on DigitalOcean as it continues to innovate and expand its offerings.
