DigitalOcean (DOCN) slides 5.5% as investors weigh growth push vs. near-term profitability

DigitalOcean Holdings, Inc. (DOCN) is down 5.5% today. Here is some analysis on what might have caused this price movement.

Analysis: The drop appears tied to a “sell-the-news” reaction after DigitalOcean’s Q4 and full-year 2025 update, where strong growth and higher longer-term revenue targets were offset by guidance that implies near-term margin and earnings pressure. Investors also seem focused on the cash flow and profitability trade-offs from expanding AI/inference capacity.

Details:

DigitalOcean reported Q4 2025 revenue of about $242 million (up 18% year over year) and highlighted record incremental organic ARR, alongside rapid growth in larger customers.

The company raised its 2026 revenue outlook to $1.075–$1.105 billion and provided a Q1 2026 outlook that includes adjusted EBITDA margin of 36%–37% and non-GAAP diluted EPS of $0.22–$0.27.

Management’s investor update emphasized accelerating AI and inference-related growth, including plans to add significant capacity that could pressure margins while utilization ramps.

A new annual report filing accompanied the earnings release, giving investors more detail on updated metrics definitions and financial line items that may affect how results are modeled.

Sources:

DigitalOcean Investor Relations, SEC, The Motley Fool

Disclaimer: This price movement analysis was generated with the help of AI. Please double-check the information provided for mistakes.

$DOCN Insider Trading Activity

$DOCN insiders have traded $DOCN stock on the open market 1 times in the past 6 months. Of those trades, 0 have been purchases and 1 have been sales.

Here’s a breakdown of recent trading of $DOCN stock by insiders over the last 6 months:

BRATIN SAHA (Chief Product & Tech Officer) sold 13,010 shares for an estimated $414,628

To track insider transactions, check out Quiver Quantitative's insider trading dashboard.

$DOCN Hedge Fund Activity

We have seen 207 institutional investors add shares of $DOCN stock to their portfolio, and 182 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

UBS GROUP AG added 1,573,245 shares (+338.4%) to their portfolio in Q4 2025, for an estimated $75,704,549
BALYASNY ASSET MANAGEMENT L.P. removed 838,724 shares (-73.6%) from their portfolio in Q4 2025, for an estimated $40,359,398
NORGES BANK removed 792,480 shares (-100.0%) from their portfolio in Q4 2025, for an estimated $38,134,137
LAZARD ASSET MANAGEMENT LLC removed 776,966 shares (-50.4%) from their portfolio in Q4 2025, for an estimated $37,387,603
MARSHALL WACE, LLP removed 705,917 shares (-96.4%) from their portfolio in Q4 2025, for an estimated $33,968,726
ALYESKA INVESTMENT GROUP, L.P. removed 638,401 shares (-100.0%) from their portfolio in Q4 2025, for an estimated $30,719,856
LMR PARTNERS LLP added 620,000 shares (+inf%) to their portfolio in Q4 2025, for an estimated $29,834,400

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.

$DOCN Analyst Ratings

Wall Street analysts have issued reports on $DOCN in the last several months. We have seen 2 firms issue buy ratings on the stock, and 0 firms issue sell ratings.

Here are some recent analyst ratings:

Canaccord Genuity issued a "Buy" rating on 11/06/2025
B of A Securities issued a "Buy" rating on 11/06/2025

To track analyst ratings and price targets for $DOCN, check out Quiver Quantitative's $DOCN forecast page.

$DOCN Price Targets

Multiple analysts have issued price targets for $DOCN recently. We have seen 10 analysts offer price targets for $DOCN in the last 6 months, with a median target of $79.0.

Here are some recent targets:

Gabriela Borges from Goldman Sachs set a target price of $78.0 on 02/25/2026
Raimo Lenschow from Barclays set a target price of $69.0 on 02/25/2026
Wamsi Mohan from B of A Securities set a target price of $86.0 on 02/25/2026
Timothy Horan from Oppenheimer set a target price of $85.0 on 02/25/2026
Radi Sultan from UBS set a target price of $68.0 on 02/25/2026
Thomas Blakey from Cantor Fitzgerald set a target price of $83.0 on 02/25/2026
Patrick Walravens from Citizens set a target price of $83.0 on 02/25/2026

This article is not financial advice. See Quiver Quantitative's disclaimers for more information. Note that there may be inaccuracies due to mistakes in ticker-mapping, and other anomalies.