Truist Securities initiated coverage on DigitalOcean (DOCN) with a Buy rating on Thursday. The firm set a price target of $175, suggesting significant upside for the cloud computing stock. Shares rose in pre-market trading following the announcement.
Analyst Miller Jump cited favorable supply and demand dynamics in the cloud infrastructure market, particularly for GPUs. DigitalOcean targets small and mid-size businesses to capitalize on these infrastructure trends. This focus allows the company to implement pricing changes more quickly than competitors restricted by long-term enterprise contracts.