shares of cloudflare (Net 16.45%) It was up 16.3% as of 1:20 p.m. ET Thursday, following positive analyst comments from MoffettNathson about the company’s exposure to opportunities in the rapid adoption of artificial intelligence.
Cloudflare’s vast server network is already improving the performance and security of many popular websites, but MoffettNathson analyst Sterling Auty says the company has a huge opportunity in AI. I’m here. His ChatGPT on OpenAI and appleiCloud Private Relay Service.
Stocks fell sharply last year as investors worried about macroeconomic headwinds and the potential for companies to cut spending on cloud services. Additionally, Auty says some investors are nervous about the drop in cryptocurrency prices and how it will affect his Cloudflare, which counts cryptocurrency exchanges popular among its customers. There is a possibility.
Still, Cloudflare continued to report strong revenue growth last year. In the third quarter (the most recently reported quarter), sales were up 47% year-over-year as annual revenue surpassed his $1 billion mark.
In fact, AI is a tailwind that investors should pay attention to in the long term. Two years ago, Cloudflare NVIDIA It deploys graphics processing units (GPUs) to run AI-based applications on edge servers in its data centers around the world.
Overall, management believes that as it continues to introduce new services for network customers, the total market addressable will grow 35% to $135 billion over the next few years. The stock may seem expensive given its current price-to-sales ratio of 23, but the company’s growth rate and opportunity to expand its offerings will prove incredibly valuable over time. It may prove to be
John Ballard holds a position at Cloudflare. The Motley Fool has positions in and recommends Apple, Cloudflare, and NVIDIA. The Motley Fool recommends the following options: Apple’s March 2023 $120 Long Call and Apple’s March 2023 $130 Short Call. The Motley Fool’s U.S. headquarters has a disclosure policy.