What happened?
A number of stocks fell in the morning session as Democratic victories in the U.S. midterm elections continued to fuel investor concerns that tighter regulatory scrutiny will slow data-center expansion, CNBC reported.
The policy headwinds intensified broader unease over heavy capital spending across the technology sector. Tandem Investment Advisors portfolio manager Jordan Watson noted in comments carried by CNBC that the rotation reflects a demand for discipline regarding whether massive infrastructure investments will ultimately yield expected returns.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Data storage company DigitalOcean (NYSE: DOCN) fell 15%. Is now the time to buy DigitalOcean? Access our full analysis report here, it’s free.
- Developer operations company JFrog (NASDAQ: FROG) fell 11%. Is now the time to buy JFrog? Access our full analysis report here, it’s free.
- Network security company Palo Alto Networks (NASDAQ: PANW) fell 8.2%. Is now the time to buy Palo Alto Networks? Access our full analysis report here, it’s free.
- Data infrastructure company Oracle (NYSE: ORCL) fell 8.5%. Is now the time to buy Oracle? Access our full analysis report here, it’s free.
Zooming in on DigitalOcean (DOCN)
DigitalOcean’s shares are extremely volatile and have had 73 moves greater than 5% over the last year. But moves this big are rare even for DigitalOcean and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 3.7% on the news that Datadog projected fourth-quarter revenue that implied flat sequential growth, triggering read-through concerns across infrastructure peers.
In a company press release, Datadog reported third-quarter revenue rose 35% year over year to $1.20 billion, topping consensus estimates of $1.15 billion, while adjusted earnings per share reached $0.81. However, the company guided fourth-quarter revenue to between $1.19 billion and $1.20 billion, representing 25% to 26% annual growth but signaling a pause in sequential expansion. Datadog's consumption model functions as a barometer for enterprise cloud activity. When a high-multiple cloud bellwether guides to flat sequential revenue, this could raise concerns regarding a moderation in enterprise AI and cloud adoption.
DigitalOcean is up 50.1% since the beginning of the year, but at $71.61 per share, it is still trading 60.5% below its 52-week high of $181.29 from June 2026. Despite the year-to-date gain, investors who bought $1,000 worth of DigitalOcean’s shares 5 years ago would now be looking at only $716.53.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
