So, Glenview Capital Management – a name that probably conjures images of mahogany-paneled offices and people shouting into telephones (though, admittedly, I haven’t been inside) – has taken a rather substantial liking to DigitalOcean. Ninety-six million dollars’ worth of liking, to be precise. That’s a lot of servers. It’s a curious thing, this whole cloud business. When I was a lad, “the cloud” meant rain, or occasionally, a vaguely unpleasant smell. Now it’s where everyone keeps their data. Go figure.
They picked up a bit over two million shares in the last quarter of 2025. That makes it the 11th largest holding for Glenview – a surprisingly specific statistic, and one that makes you wonder what numbers 1 through 10 look like. It represents about 1.96% of their reportable assets. Which, in the grand scheme of things, isn’t quite enough to buy a small island, but is certainly enough to keep a few data centers humming.
Speaking of holdings, here’s where Glenview’s money is currently parked, as of late 2025:
- CVS Health: $650.50 million (a hefty 13.9% of their assets – they clearly like pharmacies)
- Teva Pharmaceutical Industries: $521.84 million (more pharmaceuticals! Perhaps they’re hedging their bets on everyone needing something)
- Global Payments: $458.29 million (money moving around – predictable, really)
- Tennant Healthcare: $394.21 million (still more healthcare – a theme is emerging)
- Amazon: $209.88 million (well, everyone has a bit of Amazon these days)
DigitalOcean itself, as of February 27, 2026, was trading at $56.06 a share – up a respectable 31.3% over the past year. It’s even managed to outperform the S&P 500 by 14 percentage points, which, in the current climate, is something of a minor miracle.
Let’s have a quick look under the hood. DigitalOcean offers cloud computing infrastructure – which, in layman’s terms, means they rent out space on their computers to other businesses. They also offer platform tools, managed databases, and container solutions. It’s all very technical, and frankly, a bit beyond me, but it seems to be working. They generate revenue primarily through subscription-based cloud services – a reliable model, if you can keep the subscribers coming. Their target market is developers, startups, and small-to-medium-sized businesses – a sensible niche, and one that’s ripe for disruption.
Here’s a little snapshot of the numbers:
| Metric | Value |
|---|---|
| Price (as of market close February 27, 2026) | $56.06 |
| Market Capitalization | $5.13 billion |
| Revenue (TTM) | $901.43 million |
| Net Income (TTM) | $259.26 million |
Now, what does all this mean for investors? Well, Glenview’s purchase is certainly eye-catching. The stock has held up reasonably well, even after a recent sell-off following its Q4 earnings report. It’s hard to say exactly what Glenview’s long-term intentions are – these things are always shrouded in mystery – but they do have a habit of holding onto positions for a while, so it’s likely they see something promising in DigitalOcean.
And the earnings do look rather good. Revenue grew 18%. Annual recurring revenue from their million-dollar customers spiked 123% – a truly impressive number. Net dollar retention from those same customers was 115%. AI ARR rose a staggering 150%. Remaining performance obligations rose sixfold! And adjusted earnings per share rose 10%. It’s the kind of performance that makes you wonder if they’re secretly building a rocket ship.
They are adding 31 megawatts of new data center capacity, which will undoubtedly impact profitability in the short term. But it’s a necessary investment, and one that should pay off handsomely in the long run. According to their CEO, Padmanabhan T. Srinivasan, they’re no longer just a niche developer cloud – they’re becoming the platform of choice for high-growth cloud and AI natives. That’s a bold statement, but the numbers seem to support it.
This shift towards larger customers and more sophisticated workloads is a smart move, and one that opens up vast growth potential. Trading at 19 times cash from operations, DigitalOcean appears reasonably priced, especially given management’s expectation of 25% sales growth in 2026. Going forward, it will be interesting to see what Glenview does with its position and whether DigitalOcean can deliver a solid return on its capital expenditures. It’s a fascinating little company, and one that I suspect we’ll be hearing a lot more about in the years to come.
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2026-02-28 19:22