11:11 AM EST, 11/06/2025 (MT Newswires) -- DigitalOcean's ( DOCN ) revenue growth reacceleration, with 2026 preliminary revenue growth guidance approaching 20%, and its data center capacity expansions entail a double upgrade of the stock's rating, BofA Securities said in a Thursday note.

The company has improved its visibility among customers, notably signing multiple eight-figure deals that reflect its ability to attract bigger clients, BofA analysts said.

DigitalOcean ( DOCN ) is rapidly expanding its data center capacity to support growth into 2026 and 2027, enabling it to meet high demand especially from AI workloads, the analysts noted.

The company secured around 30 megawatts of incremental data center capacity that will largely ramp in H1 of 2026, as well as added the ability to drive procurement of data center infrastructure through equipment leasing, according to the note.

Sustained strong growth from high-usage customer groups is accelerating annual recurring revenue, the analysts said. Innovations on its cloud computing offering at every layer, from Infrastructure to Agents, should attract new customers and push existing ones to spend more, the note said.

BofA upgraded the company's stock rating to buy from underperform and raised the price objective to $60 from $34.

Price: 46.80, Change: +0.99, Percent Change: +2.15