Person with blood group O is considered as universal donor because he has

Person with blood group AB has both antigens on RBC’s but no antibodies in plasma. AB Blood Group is known as universal recipient.
Person with blood group "O" neither has antigen A nor antigen B on their RBC’s but have both Anti-A and Anti-B antibodies in plasma.

While transfusing blood, the type/types of antigens of the donor and the type / types of antibodies of the recipient are to be taken into consideration.

The RBC of an "O" group have no antigens, so agglutination does not occur with any other group of blood. Therefore persons with "O" blood group are called universal donors.