DigitalOcean downgraded to Hold on cloud headwinds at Needham

Needham analyst Mike Cikos downgraded DigitalOcean to Hold from Buy without a price target. The analyst sees continued demand headwinds for cloud service providers. DigitalOcean is likely to be harder hit than OVH Groupe, which recently lowered its fiscal 2023 growth outlook due to greater constraints on the selling environment, by optimization based on its small business exposure, with lingering questions around its longer-term growth, the analyst tells investors in a research note. Further, in recent months, DigitalOcean has seen the retirement of the Chief Financial Officer as well as the departure of its Chief Product Officer Chief Marketing Officer, which creates greater execution risk, contends the firm.