The Insider Report: Earnings Season Kicks Off as New Leadership Emerges
Market OverviewIt was another week of choppy market activity. Only the Russell 2000 fared well, as it surged to a new all-time high again. The large cap indices weren't as strong, however. The Nasdaq closed down 0.66%, the S&P 500 closed down 0.38%, and the Dow Jones Industrial Average closed down 0.29%. Tech is still struggling to find its rhythm, but let's see if earnings season can reawaken it from its slumber. Crypto is still trying to carve out a bottom, while precious metals are looking more and more dangerous at these levels.Stocks I LikeDigital Ocean Holdings (NYSE:DOCN) – 52% Return PotentialWhat's HappeningDigitalOcean Holdings, Inc. (DOCN) is a leading cloud computing platform provider offering simple, scalable, and developer-friendly infrastructure and platform tools, including droplets, managed databases, Kubernetes, serverless functions, AI capabilities, and a marketplace for pre-configured solutions, empowering startups and growing tech companies worldwide, providing investors exposure to the rapidly growing cloud services and AI infrastructure sector with a focus on accessibility, innovation, and democratizing cloud and AI technologies.The company showed revenue of $229.63 million in the latest quarter, along with $55.99 million in earnings.The valuation in DOCN is mixed. P/E is a bit high at 22.13, while Price-to-Sales is elevated at 6.07. EV to EBITDA is solid coming in at 18.81.From a technical standpoint, DOCN recently broke out from an ascending triangle formation. This points to a continuation in the underlying uptrend.Why It's HappeningDigitalOcean Holdings Inc. is capitalizing on the AI infrastructure surge with its Gradient AI Agentic Cloud platform, driving explosive growth in Direct AI revenue that more than doubled year-over-year for the fifth straight quarter in Q3 2025. This focus on developer-friendly, cost-effective AI tools positions DigitalOcean to capture share from hyperscalers while serving scaling AI-native enterprises and digital businesses in a market hungry for accessible, high-performance cloud solutions.Accelerating revenue trajectory and raised guidance highlight DigitalOcean’s operational strength, with Q3 2025 delivering 16% year-over-year growth and the highest incremental organic ARR in company history. Management’s upward revisions for 2025 and expectations of 18-20% revenue expansion in 2026 reflect sustained momentum from AI workloads and general-purpose cloud adoption, creating a narrative of reliable scaling in a competitive yet high-demand sector.Strategic AI partnerships and product innovation enhance DigitalOcean’s ecosystem appeal, including collaborations like the one with Persistent Systems for enterprise AI workloads and ongoing enhancements to its comprehensive agentic cloud. These moves deepen customer retention, attract migrations from larger providers, and support long-term growth by addressing the evolving needs of startups, SMBs, and AI developers in a rapidly digitizing world.Path to sustained profitability strengthens DigitalOcean’s investment case, with trailing 12-month adjusted free cash flow margins reaching 21% and improving cost efficiencies across its platform. This financial discipline, combined with a balanced performance across AI and core offerings, positions the company to generate increasing shareholder value as it transitions from high-growth investment to a more mature, cash-generative cloud player.Analyst Ratings:Barclays: OverweightPiper Sandler: NeutralCanaccord Genuity: BuyMy Action Plan (52% Return Potential)I am bullish on DOCNabove $45.00-$46.00. My upside target is $80.00-82.00.Peabody Energy (NYSE:BTU) – 26% Return PotentialWhat's HappeningPeabody Energy Corporation (BTU) is a leading global coal producer and one of the world’s largest pure-play coal companies, mining and supplying thermal coal for electricity generation and metallurgical coal for steel production, offering investors exposure to the energy and commodities sector with a focus on reliable energy supply, operational efficiency, and international markets including the U.S. and Australia.The company printed $1.01 billion in the last quarter, along with $3.23 million in earnings.Valuation is solid in BTU. Price-to-Sales is at 1.08 and EV to EBITDA is at 9.27. Book Value is solid at 29.11 as well.From a technical perspective, BTU is coiled up nicely within a saucer formation. If and when it clears technical resistance, look out above because this could rip.Why It's HappeningPeabody Energy Corporation is benefiting from a tightening Powder River Basin (PRB) coal supply in early 2026, as delayed retirements of several coal-fired power units—extended under Department of Energy emergency orders—have kept demand steadier than anticipated. With much of Peabody’s 2026 output already sold forward at favorable prices, this supply constraint supports near-term revenue visibility and pricing power, positioning the company to generate strong cash flows amid ongoing U.S. energy security needs.Robust metallurgical coal exposure enhances Peabody’s growth narrative in higher-margin segments. Strategic acquisitions and operational focus on seaborne met coal, combined with global steel demand resilience, allow Peabody to capture value from premium pricing in export markets, diversifying away from purely thermal-dependent revenue and creating upside as industrial activity rebounds in key regions like Asia.Strong operational execution and cost discipline drive Peabody’s profitability resilience. ...Full story available on Benzinga.com
