Top Stock Picks of 2026: DigitalOcean Holdings

For the next few weeks, we're going to highlight one of Schaeffer's top 15 picks for 2026. Today, we have AI infrastructure stock DigitalOcean Holdings Inc (NYSE:DOCN). To access the entirety of the 2026 report, click here.

The following is our analysis from Dec. 23 for the upcoming year. DOCN is our best-performing stock for Q1, up 81% year to date.

DigitalOcean (DOCN) enters 2026 with a powerful setup as AI shifts from experimentation to real deployment across startups and SMBs. Nvidia's (NVDA) announcement that it will step away from operating its own cloud business is an underappreciated catalyst.

From a technical perspective, the stock is sitting near the top of a stage 1 accumulation base, and a breakout could fuel a move of 50% or more in 2026. Price has reclaimed its initial public offering (IPO) level, which now serves as support. The Fibonacci retracement levels from the 2021 highs to the 2023 lows create reasonable upside markers, with the 50% retracement at $76 and the 61.8% retracement at $89.50. Options activity aligns with this view.

We are seeing size buyers out in time at the October 60 strike, and based on the premium paid, they would be targeting a move of at least +50% into year-end. This is consistent with the developing technical structure and the improving fundamental backdrop.

Sentiment also sets up a favorable dynamic. Short interest is 14.57% of the stock's available float and the highest it's been since 2023, giving the stock potential for a short-covering rally as growth reacceleration takes hold. Options remain relatively inexpensive, with the equity's Schaeffer's Volatility Index (SVI) of 63% ranking in the 12th annual percentile. This signals subdued volatility expectations at a time when the company is entering a stronger phase of execution.