DigitalOcean Q2 preview signals AI-driven growth and enterprise customer wins.

DigitalOcean's shares have surged 171.2% year to date, substantially outpacing the Zacks Computer and Technology sector's 16.9% return, driven by accelerating AI adoption, a growing enterprise customer base, and strengthening financial performance as the company pivots to an AI-native cloud platform. The momentum has cooled following the company's preliminary Q2 2026 results announced on July 7, with shares declining 4.8% to $130.49 on July 10 and trading approximately 3% lower at the time of writing.

DigitalOcean anticipates remaining performance obligations (RPO) exceeding $800 million, representing more than tenfold year-over-year growth. This surge reflects multiple new nine-figure annual customer commitments for AI inference and cloud services, while weighted average contract duration is expected to extend from 1.6 years to over three years, substantially improving revenue visibility. The company projects Q2 revenue growth of approximately 29%, accelerating from 14% in the prior-year quarter, with adjusted EBITDA margin and non-GAAP earnings per share expected to land at or above the high end of prior guidance.

To address expanding AI demand, DigitalOcean has secured an additional 20 megawatts of committed data center capacity for late 2027 and early 2028, bringing total committed capacity to approximately 155 megawatts. These commitments reinforce the company's position as an emerging AI infrastructure provider while offering greater certainty around future revenues.

In Q1 2026, revenues climbed 22% year over year to $258 million, while AI customer annual recurring revenue surged 221% year over year to $170 million. ARR from customers generating more than $1 million annually increased 179% to $183 million, reflecting accelerating adoption among larger enterprises. DigitalOcean has repositioned itself as a full-stack AI-native platform integrating GPU infrastructure, inference services, managed databases, Kubernetes, and AI agents into a single integrated offering—simplifying AI deployment, reducing vendor lock-in, and positioning the company to capture enterprise demand for AI inference and agentic workloads.

The Zacks consensus earnings estimate stands at 26 cents per share, implying a 55.93% year-over-year decrease. For Q2 2026, consensus revenue guidance is $274.73 million, indicating 25.62% year-over-year growth. DigitalOcean carries a Zacks Rank #2 (Buy).