Why DigitalOcean Stock Surged Today

Shares of DigitalOcean (NYSE: DOCN) swelled on Wednesday after the cloud computing purveyor posted impressive third-quarter growth metrics.

As of 3:30 p.m. EST, DigitalOcean's stock price was up more than 19%.

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AI-related demand is boosting DigitalOcean's sales growth

DigitalOcean's revenue rose by 16% year over year to $230 million, as more companies turned to the cloud infrastructure provider for their artificial intelligence (AI) needs.

"Our unified agentic cloud platform is emerging as a preferred destination for AI and digital native enterprises building and scaling AI workloads," CEO Paddy Srinivasan said in a press release.

Customers, in turn, are ramping up their spending on the cloud platform. Clients who are set to generate more than $100,000 in annual revenue for DigitalOcean increased by 26%, and their overall spending surged by 41%.

These gains are fueling DigitalOcean's profit growth. The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 15% to $100 million.

AI should drive more cloud growth in the quarters ahead

These robust results prompted DigitalOcean to lift its full-year sales outlook. Management now projects revenue of $896 to $897 million, up from a prior forecast of $888 to $892 million.

"The combination of rapid product innovation and continued go-to-market execution is driving durable, high-quality growth across our customer base," Srinivasan said.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DigitalOcean. The Motley Fool has a disclosure policy.