Stifel Upgrades Cloudflare Inc

Investing.com—Stifel upgraded its rating on Cloudflare Inc (NYSE: NET) and raised its target price, citing increased confidence in the network firm’s technology development and earnings prospects.

Upgrade Details

Stifel raised Cloudflare to Buy from Hold, increasing its target price to $136.00 from $95.00. This new target reflects a nearly 19% increase from Cloudflare’s Monday close.

Analyst Insights

Stifel referred to Cloudflare as a “best-in-class asset,” believing that the high share price is justified by the firm’s “quality.” Analysts noted, “Self-help dynamics, and solid technology levered to many secular trends, can help Cloudflare deliver financial/stock outperformance.” They expressed increasing confidence that Cloudflare can maintain at least 25% to 30% year-on-year top-line growth, along with improved profitability.

Network Impact

Stifel praised Cloudflare’s extensive network, which supports about 20% of the internet, and mentioned that the company could leverage this coverage to drive earnings growth.

AI Demand

The brokerage observed early signs of Cloudflare benefiting from growing demand for artificial intelligence, particularly due to its low-latency network that could experience increased momentum from AI needs.

Conclusion

Stifel concluded that a growing global dependence on the internet is likely to ensure prolonged demand for Cloudflare’s services. Cloudflare remains one of the largest content delivery network service providers globally, operating a substantial portion of the internet.