What Happened?
A number of stocks fell in the afternoon session after competitive pressure from artificial intelligence increased following a Bloomberg report that Anthropic’s preliminary second-quarter revenue topped $11.5 billion.
Compounding the concern, OpenAI Chief Financial Officer Sarah Friar told employees the AI lab will go public in 2027 or sooner, CNBC reported. Friar added that Anthropic could file for its own IPO in September.
The news adds to fears that AI tools like Claude Code and OpenAI's Codex will continue to compete for traditional software budgets, a dynamic CNBC reported earlier in August.
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:
- Network Security company Palo Alto Networks (NASDAQ: PANW) fell 3.9%. Is now the time to buy Palo Alto Networks? Access our full analysis report here, it’s free.
- Endpoint Security company SentinelOne (NYSE: S) fell 4.7%. Is now the time to buy SentinelOne? Access our full analysis report here, it’s free.
- Data Storage company DigitalOcean (NYSE: DOCN) fell 7.5%. Is now the time to buy DigitalOcean? Access our full analysis report here, it’s free.
- Data Storage company Commvault (NASDAQ: CVLT) fell 3%. Is now the time to buy Commvault? Access our full analysis report here, it’s free.
Zooming In On DigitalOcean (DOCN)
DigitalOcean’s shares are extremely volatile and have had 65 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 2.9% on the news that its unit, Cloudways, announced the launch of a new product line called Managed AI Agents.
According to DOCN’s press release, Managed AI agents let customers deploy two widely used open-source agents, OpenClaw and Hermes, through the same managed-hosting dashboard they already use for websites and apps. This means Cloudways could help turn the messy job of hosting open-source AI agents into another managed plan on the dashboard customers already pay for.
This could be accretive to growth. Notably, the company cited more than 386,000 GitHub stars for OpenClaw and more than 228,000 for Hermes. The announcement followed positive sentiment in the broader AI cloud services sector, as evidenced by peer HIVE Digital Technologies signing a five-year, $350 million cloud services agreement with an enterprise customer, as reported by Newsfile Corp.
DigitalOcean is up 140% since the beginning of the year, but at $117.43 per share, it is still trading 34.9% below its 52-week high of $180.50 from June 2026. Investors who bought $1,000 worth of DigitalOcean’s shares 5 years ago would now be looking at an investment worth $2,286.
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