DigitalOcean Target Cut to $150 on Valuation Concerns, Overweight Rating Holds

Morgan Stanley cut its price target for DigitalOcean Holdings (NYSE:DOCN) to $150 from $175, citing valuation concerns. The firm maintained its Overweight rating, signaling continued optimism about the stock.

Morgan Stanley pointed to strong top-line growth and accelerating annual recurring revenue from AI-related products as strengths that support DigitalOcean’s market position.

The stock has returned 133% over the past year. The target cut reflects a valuation recalibration rather than a change in the firm’s view of the company’s growth prospects.