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I have a PaaS hosting solution that sets up a wordpress cloud (DigitalOcean) server with wordpress, all managed by the hosting provider. I still have ssh access/ftp etc... I know that mysql runs on the same server as well. Our site usually gets no real traffic (1k hits a day average) but some days we get spikes of 40-50k hits.

Currently this is my free -m stats:

             total       used       free     shared    buffers     cached
Mem:          2012       1911        101          0         57       1495
-/+ buffers/cache:        358       1654
Swap:          953          0        953

The site is running Apache + nginx + varnish + w3total cache.

My question is, is there enough ram to handle the traffic or would the server run out of memory soon?

Regards

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Your question is based on a common misunderstanding that running out of RAM is a bad thing. Running out of RAM is a perfectly normal thing that doesn't indicate any problem. RAM cannot be saved for later, so there is no advantage whatsoever to not using it. Modern operating systems try to use as much RAM as they possibly can, and nothing terrible happens if you run out.

Modern operating systems keep as little RAM free as possible, generally just a small reserve to handle allocations from interrupt contexts. Otherwise, they directly transition RAM from one use to another.