Stifel reiterates Buy on DigitalOcean stock after database launch

Stifel has reaffirmed its Buy rating on DigitalOcean Holdings Inc. (NYSE:DOCN) following the announcement of its Advanced Edition for managed databases. The cloud infrastructure company has delivered an impressive 256% return over the past year, but its stock currently trades above its Fair Value. According to InvestingPro data, 13 analysts have increased their earnings estimates for the upcoming period, reflecting growing confidence in the company's $15.3 billion market cap business.

DigitalOcean announced the availability of the Advanced Edition for its managed MySQL and PostgreSQL databases last week, with the product released in public preview in April. The Advanced Edition caters to high-concurrency and data-intensive workloads, offering faster storage scaling, enhanced performance observability, read offloading, geographic durability, and an integrated proxy to prevent application reconnects during most failover events.

DigitalOcean's Standard managed database offering for PostgreSQL and MySQL became generally available in 2019. During internal testing, the PostgreSQL Advanced Edition demonstrated up to 38% higher throughput and 50% lower p99 latency, while MySQL clusters recovered a lost primary in under three seconds on average. The Advanced Edition's storage pricing has been reduced by 46% to $0.115 per gigabyte per month.

Over 150 customers utilized the product during the preview phase. DigitalOcean's recent 21% revenue growth to $1.01 billion over the last twelve months comes despite the stock trading at a P/E ratio of 61.58. The company's strong earnings report in Q2 2026, surpassing Wall Street expectations with adjusted earnings of $0.45 per share and revenue of $281.18 million, highlights its ongoing strategic positioning and market performance.