NEW YORK, May 5, 2026, 12:15 (EDT)
Shares of DigitalOcean Holdings Inc. surged roughly 36% Tuesday, as the cloud infrastructure provider lifted its revenue forecasts for 2026 and 2027. The company cited a bump in AI workload demand and growth in major customer deals. The stock was last seen at $147.97, up $39.16 from Monday’s close.
This matters for DigitalOcean. The company, best known among developers for its cloud services, is pushing to carve out a bigger slice of the AI infrastructure pie—without falling into the trap of just peddling compute like the rest. AI customer annual run-rate revenue (quarterly AI customer revenue times four) shot up 221% year-over-year to $170 million. Inference, for reference, covers the process of running trained AI models.
The company has raised its 2026 revenue outlook to a range of $1.130 billion to $1.145 billion, representing a 25% to 27% jump over the previous year. Back in February, the forecast was set between $1.075 billion and $1.105 billion. Tuesday’s announcement bumps those projections higher.
“The Inference and agentic era needs its own cloud,” Chief Executive Paddy Srinivasan said, referring to AI systems designed to handle tasks with minimal human intervention. DigitalOcean plans to bring roughly 60 megawatts of new data-center capacity online by 2027. DigitalOcean Investors
Revenue for the first quarter climbed 22% to $258 million. Adjusted EBITDA came in at $105 million, up 21%. Net income attributable to common stockholders, though, dropped 59% to $16 million.
Annual run-rate revenue wrapped up the quarter at $1.032 billion, according to the company. Remaining performance obligation came in at $243 million—of that, $167 million is slated to be recognized within the next 12 months.
Chief Financial Officer Matt Steinfort, speaking on the earnings call, pointed analysts to ARR per megawatt as the “best metric to watch”—it measures how much annualized revenue DigitalOcean squeezes from limited data-center power. He added that forecasts aren’t anchored to any one customer. The Motley Fool
DigitalOcean took steps to bolster its balance sheet. According to an SEC filing, the company amended its credit agreement on May 4, bumping up its revolving credit facility by $112.5 million and raising its letter-of-credit sublimit another $50 million. The company also wrapped up an 11.9 million-share follow-on offering, pulling in $888 million in net proceeds; it put $500 million of that toward paying down term-loan principal.
Competition is intense. DigitalOcean’s annual report lists Amazon Web Services, Microsoft Azure, and Google Cloud as rivals in cloud and AI/ML infrastructure. The company aims for customers who see those giants as overly complicated or geared toward large enterprises.
There’s not much margin for error after the stock’s jump. DigitalOcean has flagged uncertainty over how quickly customers will pick up new AI offerings, as well as concerns about managing costs, data-center or GPU bottlenecks, and shifting trade rules—any of which might complicate hitting its higher guidance.
Right now, DigitalOcean’s results are convincing investors that its AI cloud push is actually hitting the top line, not just hype. The focus shifts to whether it can actually fill out all that new capacity profitably—especially with the bigger names still pouring cash into this space.
