Analyst Resets Price Target for Under-the-Radar AI Software Stock

In the rapidly evolving world of artificial intelligence (AI), one under-the-radar AI software stock has caught the attention of analysts. Cloudflare (NET), a company known for its global network architecture and AI enablers, has seen its stock price target reset by Goldman Sachs analysts. The investment firm recently doubled its rating on Cloudflare stock from a sell to a buy and nearly doubled the price target to $140 from $77, indicating potential upside of 22% from Cloudflare shares' closing price of $114.73 on Jan. 3, 2025.

Cloudflare's unique globally distributed cloud platform and easily scalable, flexible network architecture have been highlighted as advantages over competitors. The company's systems help web users move data quickly, efficiently, and securely, no matter where it's accessed worldwide. By placing their content behind Cloudflare's network, businesses can make their data move quickly, securely, and efficiently, no matter where it's accessed worldwide.



Cloudflare's role in the AI boom is set to gain more attention as the company appears well-placed to capitalize on growing trends in AI and cybersecurity. The company's Workers AI platform extends Cloudflare's Workers serverless platform, leveraging Nvidia GPUs to power AI workloads across Cloudflare's global network. This enables users to access generative AI and other machine-learning tasks within Cloudflare's infrastructure, making it easier and more cost-effective to create and scale these AI models.

Cloudflare's serverless and pay-as-you-go model means developers can focus on building their applications without worrying about managing infrastructure. This allows businesses to scale their AI workloads easily and cost-effectively. The company's global network also enables it to deliver AI inference incredibly close to where anyone is on Earth, reducing latency and improving performance.



Cloudflare's strong financial performance and growing demand for cybersecurity and AI-enabled solutions have driven its stock price up 27% in 2024. In Q3 2024, the company reported a GAAP net loss of 4 cents a share, narrowed from 7 cents in the year-earlier period. Adjusted profit was 20 cents a share, up 25% from 16 cents a year earlier. Revenue was $430.1 million, up 28%. Cloudflare continued to expand its reach among large customers, with 35% of the Fortune 500 now using its services. The company added a record 219 new large customers in Q3, those that pay more than $100,000 per year, and now has 3,265 large customers, up 28% year over year.

Analysts have raised Cloudflare’s stock price targets, with Goldman Sachs' significant boost indicating potential upside of 22% from Cloudflare shares' closing price of $114.73 on Jan. 3, 2025. The investment firm highlighted Cloudflare's unique globally distributed cloud platform and easily scalable, flexible network architecture as advantages over competitors.

Cloudflare's strong financial performance, expanding customer base, and analysts' bullish outlook suggest that the company is well-positioned to capitalize on the growing AI market. The company's unique global network architecture, higher GPU utilization, serverless and pay-as-you-go model, security focus, and growing customer base make it a strong contender in the AI software market. As AI continues to grow in importance, Cloudflare's role in enabling AI at the edge and delivering AI inference close to users will become increasingly valuable.

Investors who are looking for an under-the-radar AI software stock with strong growth prospects and a compelling valuation should consider Cloudflare. The company's unique advantages and strong financial performance make it an attractive investment opportunity in the growing AI market. However, as with any investment, it's essential to do your due diligence and consider the risks and potential rewards before making a decision.