Opinion: Buy This Growth Stock to Beat the S&P 500 in 2027

Resumen detallado

Despite a recent bout of volatility, the S&P 500 (SNPINDEX:^GSPC) stock market index has returned almost 10% in 2026. However, investors who bought DigitalOcean (NYSE:DOCN) stock…

Despite a recent bout of volatility, the S&P 500 (SNPINDEX:^GSPC) stock market index has returned almost 10% in 2026. However, investors who bought DigitalOcean (NYSE:DOCN) stock at the start of this year would be sitting on a gain of 65% instead (as of the market close on Nov. 10).

DigitalOcean is a provider of artificial intelligence (AI) cloud services, which businesses use to develop and deploy chatbots, agents, and other applications. The company's revenue growth is accelerating thanks to soaring demand for its AI Native Cloud platform, and management expects the momentum to continue in 2027.

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Following a recent correction, DigitalOcean stock is now trading at a relatively attractive valuation, which could set the stage for another blistering return next year. Here's why I think it will crush the S&P 500.

DigitalOcean has always offered a basic set of cloud services with affordable prices, highly personalized support, and a simple dashboard for easy deployment, even for customers without in-house technical staff. Small and mid-sized businesses (SMBs) found those attributes particularly attractive, and DigitalOcean is now applying the same blueprint to its growing suite of AI services.

Most businesses don't have billions of dollars to build AI data centers, or the technical expertise to create a comprehensive AI model from scratch. Renting those tools from a third-party provider can be far more cost-effective, and DigitalOcean's AI Native Cloud platform is the ultimate all-in-one solution.

The AI Native Cloud has multiple layers, and at the foundation is infrastructure. DigitalOcean operates 20 data centers filled with AI chips from top suppliers like Nvidia and Advanced Micro Devices, which provide…

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