Applied Digital (NASDAQ:APLD) and DigitalOcean (NYSE:DOCN) Head to Head Survey

DigitalOcean (NYSE:DOCN) and Applied Digital (NASDAQ:APLD) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Insider & Institutional Ownership

49.8% of DigitalOcean shares are owned by institutional investors. Comparatively, 65.7% of Applied Digital shares are owned by institutional investors. 1.0% of DigitalOcean shares are owned by insiders. Comparatively, 9.5% of Applied Digital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for DigitalOcean and Applied Digital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DigitalOcean	0	3	12	2	2.94
Applied Digital	2	1	12	3	2.89

DigitalOcean currently has a consensus price target of $152.81, indicating a potential upside of 23.58%. Applied Digital has a consensus price target of $68.15, indicating a potential upside of 179.42%. Given Applied Digital’s higher possible upside, analysts clearly believe Applied Digital is more favorable than DigitalOcean.

Risk & Volatility

DigitalOcean has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500. Comparatively, Applied Digital has a beta of 5.72, suggesting that its share price is 472% more volatile than the S&P 500.

Earnings and Valuation

This table compares DigitalOcean and Applied Digital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DigitalOcean	$901.43 million	14.32	$259.26 million	$2.19	56.46
Applied Digital	$611.31 million	11.63	-$244.00 million	($0.89)	-27.40

DigitalOcean has higher revenue and earnings than Applied Digital. Applied Digital is trading at a lower price-to-earnings ratio than DigitalOcean, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DigitalOcean and Applied Digital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DigitalOcean	23.26%	31.01%	5.76%
Applied Digital	-37.78%	-16.42%	-4.00%

Summary

DigitalOcean beats Applied Digital on 9 of the 14 factors compared between the two stocks.

About DigitalOcean

DigitalOcean Holdings, Inc., through its subsidiaries, operates a cloud computing platform in North America, Europe, Asia, and internationally. The company’s platform provides on-demand infrastructure and platform tools for developers, start-ups, and small and growing digital businesses. It also offers infrastructure-as-a-service (IaaS) solutions comprising compute and storage services, as well as networking projects, including Cloud Firewalls software, Managed Load Balancers software, and Virtual Private Cloud (VPC). The company also provides platform-as-a-service (PaaS) solutions, such as managed databases; managed Kubernetes and container registry; application platform to build, deploy, and scale applications; Functions, a serverless compute solution; and Uptime for real-time uptime and latency alerts, as well as software-as-a-service (SaaS), including managed hosting and DigitalOcean Marketplace, a platform where developers can find pre-configured applications and solutions. In addition, it offers artificial intelligence (AI)/machine learning (ML) applications comprising GPU virtual machines for scaling AI applications; Notebooks, a simple cloud workspace that runs on GPUs that provides a managed interactive development environment for exploring data, and training and building machine learning models; and Deployments for deploying their machine learning model as an API endpoint. The company’s customers include software engineers, researchers, data scientists, system administrators, students, and hobbyists. Its customers use its platform in various industry verticals and for a range of use cases, such as web and mobile applications, website hosting, e-commerce, media and gaming, personal web projects, managed services, and AI/ML applications. DigitalOcean Holdings, Inc. was incorporated in 2012 and is headquartered in New York, New York.

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.