DigitalOcean price target raised to $34 from $31 at BofA

BofA raised the firm’s price target on DigitalOcean (DOCN) to $34 from $31 and keeps an Underperform rating on the shares. The company reported strong Q2 results, beating guidance and Street expectations on revenue and earnings per share, with management raising FY25 guidance across all metrics due to the outperformance in the quarter and a strong demand environment, the analyst tells investors in a research note. While encouraged by these recent trends, the firm notes that profitability remains “lumpy” and gross margins have decreased. The analyst added that the firm believes DigitalOcean is headed in the right trajectory for growth.