Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTNauman KhanSat, July 4, 2026 at 3:00 PM GMT+2 3 min readA close-up shot of numbers and stock charts by Atlantic Ambience via PexelsDigitalOcean (DOCN) just reached an important milestone. The cloud infrastructure company officially joined the Russell 1000 Index on June 29, a move that reflects its rapid growth and expanding market value. The announcement comes after an exceptional first quarter in which the company beat Wall Street's expectations on both revenue and earnings while raising its full-year outlook.The timing couldn't be better. DigitalOcean has transformed itself into an AI-focused cloud platform, attracting larger enterprise customers and AI startups at a rapid pace. That combination has sent DOCN stock soaring over the past year. But after such a massive rally, investors also need to consider whether the valuation already reflects much of the optimism.More News from BarchartBillionaire Mark Cuban Says He Got Rich And Drunkenly Bought A $125K American Airlines Lifetime Pass —'I Called Them Up And Just Slurred My Words'AMD Beats NVDA in 1H26 Returns. Here's What's Next for 2H26.FedEx Is Abandoning Its Supply Chain Business. FDX Stock Investors Need the Logistics Giant to Protect Its Core Network.Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now!The Russell 1000 Inclusion Caps an Incredible RunJoining the Russell 1000 is more than just a symbolic achievement. It means DigitalOcean has grown from a small-cap company into a firm that qualifies for one of the market's most widely followed large-cap indices. The change became effective on June 29, prompting passive index funds that track the Russell 1000 to add DOCN shares to their portfolios.Investors welcomed the news. DOCN stock gained almost 8% on June 29 and has been one of the market's biggest winners over the past year. Shares have surged approximately 350% over the last 12 months and are up 167% year-to-date (YTD).The rally hasn't been driven by the index inclusion alone. Investors have also responded positively to DigitalOcean's AI strategy, stronger-than-expected earnings, and growing demand from larger customers running AI inference workloads.The biggest challenge for investors isn't the business. It's the stock price. Following its massive rally, DigitalOcean now trades at 119 times trailing earnings as tracked by Barchart, well above the broader tech sector. Its price-to-sales (P/S) ratio has also expanded well beyond many cloud infrastructure peers.www..barchart.comDigitalOcean's Q1 Earnings Show AI Demand Is AcceleratingQ1 results explain why investors have become so optimistic. Revenue climbed 22% year-over-year (YOY) to $258 million, comfortably ahead of Wall Street expectations of roughly $249 million. Adjusted earnings also topped estimates, with non-GAAP EPS of $0.44 versus analyst expectations near $0.26.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info