Shares of DigitalOcean Holdings (DOCN +40.40%) spiked on Tuesday after the cloud computing provider highlighted the torrid growth in its artificial intelligence (AI)-focused offerings.
Image source: Getty Images.
A cloud for AI agents
DigitalOcean's revenue jumped 22% year over year to $258 million in the first quarter. Its earnings before interest, taxes, depreciation, and amortization (EBITDA), in turn, leaped 21% to $105 million.
DigitalOcean's AI-related gains were stunning. Its AI customer annual run rate revenue (ARR) soared 221% to $170 million.
NYSE: DOCN
Key Data Points
With the launch of its AI-Native Cloud in April, DigitalOcean is positioning itself as a leading platform for AI agents. Its new Inference Engine is helping to reduce the costs of using AI models to make decisions and predictions.
DigitalOcean also acquired Katanemo Labs last month to further bolster its agentic AI capabilities.
"The Inference and agentic era needs its own cloud," CEO Paddy Srinivasan said. "DigitalOcean built it, and our record Q1 results demonstrate the strength of our platform."
Accelerating growth
These encouraging results drove DigitalOcean to lift its full-year guidance. Management now sees revenue rising by roughly 26% to $1.14 billion in 2026.
Better still, DigitalOcean expects its revenue growth to accelerate to over 50% in 2027.
"We continue to invest in what we believe is a generational market opportunity, adding approximately 60 MW [megawatts] of incremental committed data center capacity that will come online throughout 2027 to support growing customer demand," Srinivasan said.
