1 Glorious Growth Stock Down 75% to Buy Hand Over Fist, According to Wall Street

Core Insights - DigitalOcean reported record revenue and profits for Q2 2025, with a revenue of $218.7 million, up 14% year-over-year, and AI revenue soaring over 100% [9][10] - The stock surged over 30% post-results but remains 75% below its all-time high from 2021 [2] - Analysts are generally bullish, with a majority rating the stock as a buy and an average price target of $41.60, suggesting a potential upside of 34% [12][13] Financial Performance - The company generated $218.7 million in revenue for Q2 2025, exceeding management's forecast of $216.5 million [9] - Net income surged by 93% to $37 million, attributed to strong revenue growth and effective cost management, with operating expenses rising only 3.8% year-over-year [10] - The full-year revenue forecast for 2025 was increased from $880 million to $890 million [9] AI and SMB Focus - DigitalOcean is targeting small and mid-size businesses (SMBs) with clear pricing and personalized service, differentiating itself from larger cloud providers [5] - The company launched GradientAI, a platform providing access to AI tools and large language models, facilitating AI software development for SMBs [7] - The number of AI agents created using GradientAI doubled to over 14,000 between Q1 and Q2 2025, indicating rapid adoption [8] Market Sentiment - Wall Street analysts show a bullish consensus, with seven out of 13 rating the stock as a buy and none recommending a sell [12] - The stock trades at a price-to-sales ratio of 3.7, near its lowest since going public, and a price-to-earnings ratio of 23.7, lower than the S&P 500's 25.2 [13][15] - Analysts believe the stock deserves a higher valuation due to strong earnings growth, which has more than doubled in the first two quarters of 2025 [15]