Why DigitalOcean (DOCN) Shares Are Sliding Today

Adam Hejl /
2023/04/25 8:30 am EDT

What Happened:

Shares of cloud computing provider DigitalOcean (NYSE: DOCN) fell 5.26% in the pre-market session after analyst Mike Cikos of Needham downgraded the stock's rating from Buy to Hold. The analyst did not provide a price target.

What is the market telling us:

DigitalOcean's shares are very volatile and over the last year have had 65 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

DigitalOcean is up 23.4% since the beginning of the year, but at $31.54 per share it is still trading 40.1% below its 52-week high of $52.67 from August 2022. Investors who bought $1,000 worth of DigitalOcean's shares at the IPO in March 2021 would now be looking at an investment worth $742.12.

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