Q2 Earnings Outperformers: DigitalOcean (NYSE:DOCN) And The Rest Of The Data Storage Stocks

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at DigitalOcean (NYSE:DOCN) and the best and worst performers in the data storage industry.

Data is the lifeblood of the internet and software in general, and the amount of data created is accelerating. As a result, the importance of storing the data in scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand from analyzing simple, structured datasets to high-scale processing of unstructured data such as images, audio, and video.

The 4 data storage stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.5% while next quarter’s revenue guidance was in line.

Luckily, data storage stocks have performed well with share prices up 28.9% on average since the latest earnings results.

Slowest Q2: DigitalOcean (NYSE:DOCN)

Built for simplicity in a world of complex cloud solutions, DigitalOcean (NYSE:DOCN) provides a simplified cloud computing platform that enables developers and small businesses to quickly deploy and scale applications.

DigitalOcean reported revenues of $218.7 million, up 13.6% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a strong quarter for the company with full-year EPS guidance exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

“We delivered another quarter of solid performance across both AI and core cloud. Total revenue grew 14% year-over-year, we achieved the highest incremental ARR since Q4 of 2022, and we more than doubled our AI/ML revenue year-over-year.” said Paddy Srinivasan, CEO of DigitalOcean.

DigitalOcean delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. Interestingly, the stock is up 37.6% since reporting and currently trades at $37.20.

Is now the time to buy DigitalOcean? Access our full analysis of the earnings results here, it’s free.

Best Q2: Snowflake (NYSE:SNOW)

Named after the unique architecture of its data warehouse which resembles a snowflake pattern, Snowflake (NYSE:SNOW) provides a cloud-based data platform that enables organizations to consolidate, analyze, and share data across multiple cloud providers.

Snowflake reported revenues of $1.14 billion, up 31.8% year on year, outperforming analysts’ expectations by 4.9%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ billings estimates.

Snowflake achieved the fastest revenue growth among its peers. The company added 48 enterprise customers paying more than $1 million annually to reach a total of 654. The market seems happy with the results as the stock is up 10.9% since reporting. It currently trades at $222.40.

Is now the time to buy Snowflake? Access our full analysis of the earnings results here, it’s free.

Commvault (NASDAQ:CVLT)

Born from the need to create ironclad protection in an increasingly dangerous digital world, Commvault (NASDAQ:CVLT) provides data protection and cyber resilience software that helps organizations secure, back up, and recover their data across on-premises, hybrid, and multi-cloud environments.

Commvault reported revenues of $282 million, up 25.5% year on year, exceeding analysts’ expectations by 5.2%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ billings estimates and a solid beat of analysts’ annual recurring revenue estimates.

Interestingly, the stock is up 19.2% since the results and currently trades at $195.06.

Read our full analysis of Commvault’s results here.

MongoDB (NASDAQ:MDB)

Named after "humongous database," reflecting its ability to handle massive data loads, MongoDB (NASDAQ:MDB) provides a flexible document-based database platform that helps developers build, deploy, and maintain modern applications more efficiently.

MongoDB reported revenues of $591.4 million, up 23.7% year on year. This result surpassed analysts’ expectations by 6.8%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations.

MongoDB pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The company added 58 enterprise customers paying more than $100,000 annually to reach a total of 2,564. The stock is up 47.9% since reporting and currently trades at $317.

Read our full, actionable report on MongoDB here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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