Why DigitalOceans Holdings Inc. (DOCN) Received Analyst Approval This Week?

We recently published a list of 10 Stocks That Received Analyst Approval This Week. In this article, we are going to take a look at where DigitalOceans Holdings Inc. (NYSE:DOCN) stands against other stocks that received analyst approval this week.

The US market performance in the last week was quite bullish, with the S&P, DOW, and NASDAQ boasting weekly gains of 3.71%, 3.73%, and 3.84% respectively. The week marked the last full week of the outgoing Democratic government, with Donald Trump set to be sworn in early next week.

Just like the last time he became President, Donald Trump is set to make some drastic changes once he takes over. His energy policy and stance on crypto will continue to be of focus for most traders. During the outgoing week, a lot of companies received the backing of Wall Street analysts, among them quite a few energy and automobile companies.

We looked at a few of those companies that received a boost from analysts this week. To come up with the list of 10 stocks that received analyst approval this week, we only considered companies with a market cap of at least $1 billion.

A close up view of a laptop computer, the cloud computing platform displayed on the screen.

DigitalOceans Holdings Inc. (NYSE:DOCN)

DigitalOceans Holdings Inc. is a global cloud computing platform provider that provides tools and infrastructure for start-ups and many other types of businesses. The company was in the spotlight because it was upgraded by Morgan Stanley from Equal-Weight to Overweight with a target price from $40 to $41.

DOCN received the upgrade because of its potential in AI and machine learning. It is expected to grow at 23% per CAGR (compound annual growth rate) reaching over $213 billion in the upcoming 3 years. According to the note released by analyst John Baer, “DigitalOcean’s larger customers are demanding more product capabilities and the company is delivering”. It shows the increasing demand for the company’s products which will drive more revenue.

Although there was a downturn in the company’s stock price in the past month, it has already gained 8.34% in the last 5 days. Investors have the potential to gain from this ongoing upward trend.

Overall, DOCN ranks 7th on our list of received analyst approval this week. While we acknowledge the potential of DOCN as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as DOCN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.