Meet the Unstoppable Artificial Intelligence (AI) Stock Obliterating Every Member of the "Magnificent Seven" in 2026

By Anthony Di Pizio – Apr 28, 2026 at 7:35AM ESTKey PointsMost cloud computing companies offer a growing portfolio of tools and services to help their customers deploy AI software. "Magnificent Seven" members Amazon, Microsoft, and Alphabet dominate the AI cloud space, but a minnow called DigitalOcean is also having incredible success. DigitalOcean stock has already doubled in 2026, and with accelerating revenue growth on the horizon, it can still go much higher. The "Magnificent Seven" moniker was coined by Wall Street in 2023 to describe a group of seven powerhouse technology companies. They are known for consistently producing better returns than the rest of the market thanks to their dominance in industries like consumer hardware, enterprise software, cloud computing, and artificial intelligence (AI). But the Magnificent Seven stocks are off to a rough start to 2026, with just three of them outperforming the S&P 500 index so far. In fact, they are being crushed by a tiny stock called DigitalOcean (DOCN +3.94%), which has doubled this year already. Data by YCharts. You might be wondering why I'm comparing a $10 billion minnow like DigitalOcean to an elite group of trillion-dollar giants. It's because DigitalOcean technically competes with Magnificent Seven companies like Microsoft, Alphabet (Google), and Amazon in the cloud computing business. It offers a growing portfolio of AI tools and services, which are supercharging its revenue growth, so here's why its stock probably isn't done going higher. Image source: Getty Images. Betting big on AI Amazon Web Services, Microsoft Azure, and Google Cloud dominate the cloud industry, but they typically go after the largest customers with the highest spending potential. Acquiring small and medium-sized business (SMB) customers won't have a big impact on their revenue, so they don't target them as aggressively. DigitalOcean, on the other hand, exclusively works with start-ups and SMBs. It offers them affordable and transparent pricing, highly personalized service, and a simple dashboard that makes deploying cloud tools easy, even without in-house technical staff. Now, the company is applying the same blueprint to help its clients tap into the power of AI. DigitalOcean operates data centers equipped with advanced graphics processing units (GPUs) from Nvidia and Advanced Micro Devices, which are the primary chips used in AI development. It rents computing capacity to its SMB customers, allowing them to start with just one chip and scale as needed, which is ideal for small AI workloads, such as running Web-based customer service chatbots. DigitalOcean says its data center computing capacity is up to 75% cheaper to rent than the equivalent infrastructure from hyperscale cloud providers, so demand is through the roof. In fact, the company raised $800 million from investors in March to fund the construction of more data centers. ExpandNYSE: DOCNDigitalOceanToday's Change(3.94%) $3.75Current Price$98.97Key Data PointsMarket Cap$10BDay's Range$90.11 - $99.0652wk Range$25.56 - $99.23Volume298Avg Vol4.4MGross Margin59.86% Accelerating revenue growth thanks to AI DigitalOcean's total revenue grew 15% to $901 million in 2025. But in the fourth quarter, the company reported $120 million in annual run-rate revenue (ARR) from its AI products, specifically, which soared by an eye-popping 150% year over year. Although DigitalOcean has over 650,000 customers, a small group of 21,000 so-called "digital native enterprises" (DNEs) account for roughly 62% of its annualized revenue. These are technology-first businesses that use tools like AI to scale much faster than traditional SMBs, making them more likely to become very high spenders over time. During Q4, revenue from DNEs spending at least $500,000 annually with DigitalOcean grew by 97%, and revenue from those spending at least $1 million annually soared by a whopping 123%. Demand for AI data centers is heavily outstripping supply, so DigitalOcean will attract more of these DNEs as it brings new infrastructure online. That's why management expects the company's overall revenue growth to accelerate to 21% in 2026 and then to 30% in 2027. DigitalOcean stock might still be cheap Despite the blistering gains in DigitalOcean stock of late, it still looks attractively valued. It's trading at a price-to-sales (P/S) ratio of 11.1 as I write this, which is above its long-term average of 8.1, but the picture looks very different on a forward basis. If the company grows in line with management's expectations, it will deliver around $1.4 billion in revenue during 2027, placing its stock at a forward P/S ratio of just 6.9. Data by YCharts. DigitalOcean stock would have to climb by 17% before the end of next year in order for its P/S ratio to trade in line with its long-term average of 8.1. But it would have to soar by 61% to maintain its current P/S ratio of 11.1, which I think is more likely given the company's significant AI-driven momentum. Therefore, investors seeking cloud and AI exposure beyond the Magnificent Seven might want to consider adding this up-and-coming powerhouse to their portfolio.Read NextApr 14, 2026 •By Scott LevineBest Cloud Computing Stocks for 2026 and How to InvestMar 29, 2026 •By Anthony Di PizioHow Much Higher Can DigitalOcean Stock Go?Apr 28, 2026 •By Manali Pradhan, CFA5 Top Stocks to Double Up on Right NowApr 28, 2026 •By Neil PatelThis "Magnificent Seven" Trillion-Dollar AI Stock Is Up 121% in 1 Year: It Still Faces 1 Huge Risk.Apr 28, 2026 •By Ben GranMicrosoft vs. Amazon: Which AI Stock Is the Better Buy?About the AuthorAnthony Di Pizio is a contributing Motley Fool technology analyst covering artificial intelligence, cloud computing, autonomous vehicles, and enterprise software. Previously, Anthony was a licensed fund manager, stock broker, and corporate advisor. He holds a bachelor’s degree in commerce and economics from Macquarie University in Sydney, Australia, along with ASIC RG146 certifications in financial securities and derivatives.TMFAnthonyADSCX@AnthonyADSCStocks MentionedDigitalOceanNYSE: DOCN$98.97(+3.94%)+$3.76*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.