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Opinions Nick Mersch, CFA
DigitalOcean HoldingsDOCNTOP PICKAug 20, 2026
Nick Mersch, CFAStock price when the opinion was issued
As of Aug 21, 2026. Market Open.
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A digital infrastructure play, serving small/medium companies. Shares have more than doubled from November's trough. They forecast 20% revenue growth YOY this year; has been profitable since it went public in 2022. It's odd that shares struggled last year even as they reported good numbers. The problem was that in Q2-2023 they reported that they had made accounting mistakes in its Q1 report. Share plummeted 25% in a single session. Two weeks after that, the company announced it would replace its CEO, and shares sold off more. The company's Q3 report last November saw a strong rebound that's continued since then. That accounting issue is a red flag, so he wants to some more quarters before deciding on this stock. Also, peers will improve their products to compete with DOCN.
This one's fun. Repositioning as AI-native cloud purpose-built for inference and agentic workloads. More developer-friendly platform than massive cloud players like AWS. Attractive business model of fully vertical integration. Not spending billions, but creating bespoke solutions. No dividend.
(Analysts’ price target is $175.21)