This AI Infrastructure Stock Is Up 177% in 2026, and It Is Significantly Cheaper Than Nebius
2026-10-02 13:09
•Harsh Chauhan •The Motley Fool
••••• •• Axe Cap view
AI Infrastructure Battle: DigitalOcean’s Value vs Nebius’ Growth
DigitalOcean’s cheaper valuation and strong AI customer growth make it an interesting alternative to the pricier Nebius.
DigitalOcean’s 177% rally this year shows investors are waking up to its pivot toward AI cloud infrastructure. The 212% jump in annual recurring revenue from AI customers and an 800% increase in adoption of inference services underline real momentum. What stands out is valuation—DigitalOcean trades at 16 times sales, far cheaper than Nebius’ 48 times. This makes DigitalOcean a play on AI growth with less froth. For South African investors, the appeal is in playing global AI infrastructure upside without chasing the highest growth multiples. Prosus offers some exposure to global tech, but DigitalOcean provides a purer, cheaper angle in this space. The risk? If AI adoption disappoints or Nebius proves far faster in execution, DigitalOcean’s discount might widen further. That would hurt returns in the near term. this is just our opinion and not financial advice
We would watch DigitalOcean closely and consider a selective entry, favoring value over hype. Avoid chasing Nebius at current premium multiples until it proves sustained dominance.
- DOCN
- NBIS
- USD/ZAR
- Prosus
- AI market growth falls short
- Nebius execution outpaces DigitalOcean
6/10
DigitalOcean has surged 177% in 2026 driven by its AI-focused cloud infrastructure pivot. Despite slower growth than competitor Nebius, DigitalOcean trades at a significantly cheaper valuation (16x price-to-sales vs. Nebius' 48x) with accelerating revenue growth expected to reach 50%+ in 2027. The company's AI customer ARR grew 212% year-over-year, with inference services adoption jumping 800%, positioning it as an attractive value play in the AI infrastructure boom.
Our take is based on reporting first published by The Motley Fool.