Cloud services provider DigitalOcean (NYSE:DOCN) saw its shares get hammered today. Indeed, it’s down nearly 7% at the time of writing, and it’s largely thanks to one major sea change. One analyst, in particular, sees some serious trouble coming not only for DigitalOcean but for all the other cloud stocks out there.
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Needham Securities, by way of analyst Mike Cikos, dropped the rating on DigitalOcean from Buy to Hold. Cikos also didn’t establish a price target on DigitalOcean when he lowered the rating. One of the biggest issues that Cikos sees coming for the entire cloud sector is a set of “deteriorating trends” in the cloud space, including some warnings coming out of Amazon (NASDAQ:AMZN) itself.
Overall, analyst consensus calls DigitalOcean a Hold, with four Buy ratings, six Holds, and two Sells. However, DigitalOcean offers 25.92% upside potential thanks to its average price target of $38.82.
