DigitalOcean (DOCN) Sheds 8.45% on Profit-Taking After Record High

We recently published 10 Stocks Investors Have Ditched. DigitalOcean Holdings Inc. (NYSE:DOCN) was one of the worst performers on Thursday.

DigitalOcean dropped its share prices by 8.45 percent on Thursday to close at $54.26 apiece as investors continued to take profits to take advantage of last week’s record high.

Prior to DigitalOcean Holdings Inc.’s (NYSE:DOCN) earnings performance, the stock soared to a four-year high of $70.43 last week, reflecting as much as a 27 percent jump in the month of February alone.

Last Tuesday, the company reported its earnings performance for 2025, with full-year net income attributable to shareholders more than tripling to $259 million from $84 million in 2024. Revenues also increased by 15.5 percent to $901 million from $780.6 million year-on-year.

Photo by Caspar Camille Rubin on Unsplash

In the fourth quarter alone, attributable net profit climbed by 40.4 percent to $25.66 million from $18.27 million in the same period a year earlier, while revenues jumped by 18 percent to $242.39 million from $204.9 million.

For this year, DigitalOcean Holdings Inc. (NYSE:DOCN) expects total revenues to break past the $1 billion territory, at $1.075 billion to $1.105 billion, or an implied growth of 19 to 22.6 percent year-on-year.

Following the results, Morgan Stanley raised its price target for DigitalOcean Holdings Inc. (NYSE:DOCN) by 34 percent to $75 from $56 previously, while maintaining an “overweight” rating, saying that the latter’s previous strategic initiatives are starting to drive growth results.

While we acknowledge the potential of DOCN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.