DigitalOcean Holdings (DOCN) Company Overview

DigitalOcean (DOCN) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help the stock continue moving higher in the near term.

DigitalOcean (DOCN -0.26%) generates excellent growth in cash flow, but that does not make it an undervalued investment by itself.

Even the best growth companies go through rough patches. For DigitalOcean (DOCN 3.74%) and PubMatic (PUBM -1.06%), sluggish revenue growth has been a problem in recent years.

DigitalOcean (DOCN 1.20%) has long provided cloud services to small and mid-sized businesses (SMBs). Now, it's also bringing a suite of artificial intelligence (AI) offerings to those customers, providing them with affordable access to this revolutionary technology.

DigitalOcean's NYSE: DOCN stock price has suffered for years as competition cut into its growth outlook, but the times are changing. Analysts at Morgan Stanley highlighted the deep-value opportunity when firm analysts upgraded the stock to Overweight.

DigitalOcean (DOCN 2.44%) stock peaked more than three years ago. After the stock price made a sharp reversal beginning in late 2021, its potential for investor returns seemed to have vanished, as its stock lost more than 70% of its value.

Compass (COMP) experienced a significant rise in its share price during the last trading session, with trading volume exceeding the usual amount. However, the recent changes in earnings estimates might not lead to additional price growth in the short term.

DigitalOcean, Oracle, and Dell appear to be undervalued when considering their potential for growth.

The AI revolution may still be in its early innings as tech giants and start-ups invest mountains of cash into AI infrastructure. Microsoft is reportedly set to spend an incredible $80 billion on AI data centers this year, a strong sign that heavy spending on AI is going to continue in the foreseeable future.