What Happened?

Shares of cloud computing platform DigitalOcean (NYSE: DOCN) jumped 6.2% in the morning session after Piper Sandler raised its price target on the company, and it announced an expansion of its AI partnerships. 

The investment firm Piper Sandler increased its price target on DigitalOcean shares to $50 from $47, noting it was encouraged by bigger deal momentum. This positive analyst action came as the company also revealed a new partnership with Persistent Systems, a global digital engineering firm. Under the agreement, Persistent selected DigitalOcean as its cloud and AI infrastructure provider for its AI-powered platform. The collaboration aimed to help companies adopt AI by addressing challenges like rising costs and security. The stock's rise was also supported by a favorable market environment, as technology and AI-linked stocks saw broad gains.

After the initial pop the shares cooled down to $50.96, up 4.1% from previous close.

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What Is The Market Telling Us

DigitalOcean’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 17 days ago when the stock gained 3.9% on the news that investor optimism around artificial intelligence fueled broad market gains. 

Technology stocks with a focus on artificial intelligence once again led the market higher, boosting the Nasdaq and S&P 500. Companies at the forefront of the AI boom, such as Nvidia and Broadcom, saw significant jumps in their share prices. The rally reflected a renewed belief among investors in the transformative potential of AI technology to drive future growth and productivity. 

The rally was further supported by a surprise cooling in the November consumer price index (CPI) report, which triggered market pricing for additional rate cuts in the coming year. This created a more favorable environment for growth-oriented software companies as borrowing costs decrease.

DigitalOcean is up 4.1% since the beginning of the year, and at $50.96 per share, it is trading close to its 52-week high of $51.67 from November 2025. Investors who bought $1,000 worth of DigitalOcean’s shares at the IPO in March 2021 would now be looking at an investment worth $1,199.

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