May. 6 at 10:28 AM
BofA⬆️
$DOCN's PT to
$200 (was
$107), reit'd Buy/said: DOCN reported F1Q earnings where they raised F26E rev guide to 25-27% growth y/y with F4Q exiting at 30%+. F27 is now expected to grow above 50% vs 30% just 90 days ago.
$MSFT $AMZN GOOGL
BofA added—This comes on the heels of building out a solid Agentic Al platform (signing Cursor as a customer) and adding significant capacity over the foreseeable future to meet this demand.
As with any rev acceleration, there are increased investments but EBITDA margins are targeted at 40%. FCF margins would face incremental pressure but finance leases better align investment timing with revs. DOCN now expects to add an incremental 60MW of capacity ramping in 2027 leading to total committed capacity of ~135MW.
As the ratio of CPU infrastructure in an inference/agentic world should increase relative to GPU's we see upside to the
$13MN ARR/MW previously guided. Reit. Buy on upside from agentic Al, ARR growth, and expanding GPU capacity . PO to
$200.
