Shares of the New York company were up 12% to $57.89 at last check.
Citron said in a report that "simplicity has become the key to winning in the SMB (small and medium sized business) market."
"One of the greatest blunders we have made over the past 20 years of publishing Citron Research, is not realizing the power of Shopify when the stock was $100," the report said
Last week, Shopify reported second-quarter earnings that blew past analysts' forecasts and revenue that topped $1 billion for the first time.
The report said that the next wave is the SMB transformation to the cloud and multi cloud.
"We’ve seen this movie before and just like how Shopify and Square saw that SMBs were not far behind large enterprises in adopting e-commerce and digital payments," the report said. "DigitalOcean is in the leading position to capitalize on this mega trend."
Citron's study said that "the transformation to the cloud for large enterprises is obviously already on its way," and noted that analysts have estimated the value of Amazon Web Services, Amazon's (AMZN) - Get Amazon.com, Inc. Report cloud computing platform, at $700 billion to $800 billion.
"While AWS sells a product that is not just expensive but also very difficult to use, DigitalOcean, like Shopify has created an easy solution for SMBs to embrace cloud technology," the report said.
After speaking with former employees, customers, and even the competition, the report said, "we have found that DigitalOcean’s customer base is even more passionate and evangelical than that of Shopify, which leads us to believe that DigitalOcean will become the dominant SMB cloud provider."