Cloudflare’s Apple Intelligence Partnership, Large TAM, Generative AI Enabler Position It For Upside, Analyst Says
Cloudflare, Inc (NYSE:NET) stock is up after Morgan Stanley analyst Keith Weiss upgraded it from Equal-Weight to Overweight and raised its price target from $92 to $130.
Cloudflare remains one of the most compelling secular stories in Weiss’ software coverage universe, given its large TAM (total addressable market), highly scalable network architecture, and emergence as a potential GenAI enabler as organizations look to adopt and experiment with LLMs (large language models).
The company is well-positioned to gain a share in the top two CIO spending priorities, Security and AI/ML.
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While Weiss has been on the sidelines historically, given a relatively high multiple (~17X NTM sales), he noted multiple tailwinds heading into 2025 that could drive upward estimate revisions and sustain, if not accelerate, revenue growth in an environment of increasing growth scarcity.
Given the compute-intensive nature, Weiss noted that more AI inference is done at the “edge,” which means on network devices closer to the end user, for cost, latency, and data security/residency reasons. Cloudflare Workers AI, a serverless GPU-powered platform on …
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