BofA Securities increased its price objective for DigitalOcean (NYSE: DOCN) to $72.00 from $60.00 on Tuesday and reaffirmed a Buy rating on the cloud infrastructure provider. The upgraded target implies notable upside from DOCN's most recent quote of $58.94, which sits close to its 52-week high of $61.67.
The bank's adjustment reflects growing confidence in the commercial prospects tied to agentic AI assistants, with particular emphasis on Clawdbot. BofA observed that agentic AI implementations are proving more immediately deployable than previously estimated, a development that syncs with DOCN's strong market performance - a 104.65% price return over the last six months, per InvestingPro data.
Clawdbot is described as an open-source agent framework capable of running continuously and executing real-world actions. It integrates models with endpoints including messaging channels, APIs, and scripts. Developer interest has already produced step-by-step instructions for deploying Clawdbot on DigitalOcean Droplets, signaling community-level adoption that could translate into platform demand.
InvestingPro rates DOCN's financial health as "GREAT," assigning a score of 3.23, a metric cited by BofA to underscore the company's underlying fundamentals as developer activity grows. InvestingPro subscribers can consult an expanded Pro Research Report covering DOCN along with over 1,400 U.S. equities for additional detail.
BofA characterized DigitalOcean as moving toward a more "neocloud-like" profile, noting a capital-expenditure-light approach oriented around inferencing workloads. The firm's infrastructure was called "purpose-built" to host always-on agent workloads similar to Clawdbot, a strategic attribute BofA says has supported DOCN's 14.2% revenue growth over the past twelve months. The analyst note also cautioned that the shares trade at relatively high valuation multiples.
The bank expects DigitalOcean to capture incremental demand from agentic AI use cases beyond hyperscaler model training and inferencing, with the company expanding GPU capacity to drive additional top-line and free cash flow growth. Investors will be watching closely around the company's next earnings event, scheduled for February 19, as analysts have projected DOCN will return to profitability this year and the market assesses whether the stock's premium to InvestingPro's calculated Fair Value is warranted.
Recent corporate developments were cited alongside the BofA update. DigitalOcean Holdings Inc reported strong third-quarter 2025 results, achieving record incremental annual recurring revenue and beating its revenue growth target. The quarter's non-GAAP earnings per share of $0.54 exceeded the consensus estimate of $0.49. Following those results, several firms adjusted their outlooks: Cantor Fitzgerald raised its price target from $37 to $47 while keeping a Neutral rating, and Citizens lifted its price target from $55 to $60 and reiterated a Market Outperform rating.
Management changes and product progress were also noted. DigitalOcean appointed Vinay Kumar, a founding member of Oracle Cloud Infrastructure, as Chief Product and Technology Officer; Kumar will lead product strategy and cloud infrastructure operations. In product performance, DigitalOcean's Inference Cloud Platform materially increased throughput for Character.ai, doubling production inference throughput and lowering costs per token by 50 percent. BofA and market observers point to these developments as evidence of the company's continued expansion and innovation within its cloud offerings.
Overall, BofA's target raise reflects a view that agentic AI frameworks and corresponding inferencing workloads can create new, incremental demand opportunities for a capital-efficient cloud provider like DigitalOcean. At the same time, the elevated valuation and the need for near-term results to support the premium remain focal points for investors ahead of upcoming earnings and ongoing execution milestones.
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