Should You Buy DigitalOcean Stock After Its 12-Month Gain of 360%? An Upcoming Event on Aug. 4 Might Hold the Answer.

DigitalOcean (DOCN) has surged 360% over the past 12 months, fueled by AI infrastructure demand. The cloud services provider is expanding AI data center capacity and reported remaining performance obligations jumping tenfold to $800 million, signaling strong forward bookings.

The stock trades at a price-to-sales ratio of 15.4, reflecting elevated investor expectations. However, management's 2027 guidance implies a forward P/S of 8.1, suggesting the multiple could compress as revenue scales.

The Aug. 4 earnings report represents a key inflection point. Analysts expect management to increase 2027 revenue growth guidance above the previously stated 50% target, which would validate the current valuation and potentially sustain momentum. The guidance revision hinges on continued AI workload adoption and data center deployment progress.

The company's tenfold increase in remaining performance obligations provides visibility into future revenue conversion, though the pace of that conversion will be critical to watch in the August update.