Polen Capital backs DigitalOcean after 386% share rally
Polen Capital highlighted DigitalOcean as a prime beneficiary of cloud and AI demand after the infrastructure provider’s shares surged 386% over the past year.
Polen Capital’s 5Perspectives Small-Mid Growth Strategy outperformed the Russell 2500 Growth Index in the second quarter of 2026, returning 28.4% gross and 28.2% net compared to the benchmark’s 24.0%. The firm highlighted DigitalOcean as a standout holding, noting that investors responded positively to the company’s execution and improving growth expectations.
Operating an agentic inference cloud platform, DigitalOcean closed at $136.45 on July 21, 2026, giving it a market capitalization of $14.24 billion. Despite a recent one-month dip of 5.72%, the stock has rocketed 386.10% over the past 52 weeks. Underlying this momentum is a 22% year-over-year revenue increase to $258 million in the first quarter of 2026.
"DigitalOcean Holdings, Inc. (NYSE:DOCN) is a cloud infrastructure provider focused on serving developers, startups, and small-to-medium-sized businesses. The company offers a simple and cost-effective platform for deploying, managing, and scaling applications in the cloud," Polen wrote. "Shares outperformed during the quarter as investors responded favorably to company execution, improving growth expectations, and increasing confidence in the company's ability to benefit from broader demand for cloud infrastructure and Al-related workloads."
The fund’s bullish stance reflects a broader market rotation where SMID-cap growth stocks delivered one of their strongest quarterly performances in the past 25 years. This rebound occurred as concerns over economic growth, trade policy, and AI investment durability eased. Furthermore, continued hyperscaler spending reinforced confidence in the AI infrastructure cycle, while growing electricity demand created opportunities across power generation, grid infrastructure, and electrification.
Institutional investors appear to be aligning with this thesis. The number of hedge fund portfolios holding DigitalOcean rose to 47 at the end of the first quarter, up from 31 in the prior quarter. Polen also identified aerospace and defense modernization as another key secular growth theme supporting the broader investment landscape.
