BofA Securities analysts raised their outlook on DigitalOcean Holdings Inc. (NYSE:DOCN) following a strong first-quarter report.
The firm increased its price forecast to $200 from $107 in a Wednesday note.
The update follows management’s decision to raise fiscal 2026 revenue guidance to 25%-27% growth. Analyst Wamsi Mohan now expects fiscal 2027 revenue to surge above 50% year-over-year.
Expanding Capacity To Meet AI Demand
DigitalOcean is aggressively scaling its physical infrastructure. Management announced an additional 60 megawatt (MW) of capacity expansions. This brings the total committed capacity to approximately 135MW.
Mohan said the shift toward more central processing unit (CPU) infrastructure in an inference- and agentic-driven environment could drive upside to the previously guided $13 million annual recurring revenue (ARR) per megawatt.
The firm noted that higher inferencing workloads should drive meaningful long-term revenue and free cash flow growth.
Focus On Agentic AI And High-Value Tiers
The …
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