Core Viewpoint - The U.S. technology sector has experienced weak performance in 2025, with the Technology Select Sector SPDR Fund returning -6% as of March 7, making it the second worst performing sector among SPDR S&P 500 ETFs [1] Group 1: Overall Sector Performance - As of March 7, only 33 out of 96 large-cap U.S. tech stocks have provided a positive total return in 2025 [1] - The consumer discretionary sector has performed worse, with a total return of -8% [1] Group 2: Top Performing Stocks - Okta has emerged as the best performer among large-cap U.S. tech stocks, with a return of nearly 43% in 2025 [2] - Cloudflare's stock is up nearly 18% as of March 7, driven by strong performance and growth in large customers [6] - IBM has provided a total return of nearly 20% in 2025, benefiting from positive earnings reports and strategic discussions with government officials [10] Group 3: Okta's Performance Details - Okta reported impressive earnings in early March, leading to a stock surge of over 24% in one day [3] - The company raised its full-year revenue growth guidance from 7% to 10% and adjusted earnings growth guidance to 13% [3] - Okta achieved its first quarter of $1 billion in bookings, with 20% coming from new products [4] - The average contract size of Okta's top 25 deals in Q4 was just under $13 million, and the company plans to cut 3% of its workforce to enhance growth [5] Group 4: Cloudflare's Performance Details - Cloudflare's significant gains were driven by strong earnings on February 7, with shares spiking 18% after beating Wall Street expectations [8] - The number of large customers increased by 27%, with $1 million+ customers rising by 47% [8] Group 5: IBM's Performance Details - IBM's shares gained nearly 5% on March 7 following news of a meeting between its CEO and President Trump regarding tariff policies [11] - The company reported a $2 billion GenAI-related business, with 75% of revenue coming from consulting services [12]

Group 1 - The analyst specializes in the tech and energy sectors, indicating a focus on these industries for investment opportunities [1] - The investment strategy is medium to long-term, suggesting a preference for stability and growth over short-term gains [1] - The analyst believes there are significant value opportunities outside of the US market, highlighting a global investment perspective [1] Group 2 - There is no current investment position in any mentioned companies, indicating an unbiased analysis [2] - The article expresses personal opinions of the analyst, emphasizing independence in research and analysis [2] - No compensation is received for the article, reinforcing the integrity of the information presented [2]

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to improve significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] Group 2 - Michael has over 10 years of experience analyzing companies in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] - He leads the investing group Deep Value Returns, which offers insights through a concentrated portfolio of value stocks, timely updates, weekly webinars, and community support for investors [2]

Core Insights - Investors may hesitate to buy growth stocks with significant share price increases, but strong earnings and positive business prospects often justify these gains [1][2] - Assessing the underlying business is crucial to determine its potential for sustained growth, focusing on competitive position, growth catalysts, and total addressable market [2] Company Summaries Meta Platforms - Meta Platforms' share price increased by 48% over the past year, reaching an all-time high of $740, supported by strong revenue and net income growth [4] - Revenue is projected to grow from $116.609 billion in 2022 to $164.501 billion in 2024, with net income nearly tripling from $23.200 billion to $62.360 billion during the same period [5] - The company generated $19.3 billion in free cash flow in 2022, increasing to $54.1 billion by 2024, and raised its quarterly dividend by 5% to $0.525 [5] - Daily active users rose to 3.35 billion, with average revenue per user increasing by 15.6% to $14.25 [6] - Meta plans to invest $65 billion in AI infrastructure, aiming to enhance product offerings and customer engagement [7] Sea Limited - Sea Limited's share price nearly tripled in the past year, with strong growth across its e-commerce, digital entertainment, and financial services divisions [8] - Revenue grew from $9.955 billion in 2021 to $13.064 billion in 2023, while net income improved from a loss of $2.047 billion to a profit of $150.726 million [10] - The company generated $2 billion in free cash flow in the first nine months of 2024, surpassing the total for 2023 [11] - Shopee maintained a 48% market share in Southeast Asia, with gross orders rising by 27.3% year over year [12] Cloudflare - Cloudflare's share price surged by 53% in the past year, driven by significant revenue and operating cash flow growth [13] - Revenue increased from $656.426 million in 2021 to $1.297 billion in 2023, with operating cash flow nearly quadrupling during the same period [14] - In 2024, revenue rose by 28.8% to $1.7 billion, with gross margin improving to 77.3% [15] - The company aims to expand its customer base and increase spending among existing customers, with a total addressable market projected to grow from $176 billion in 2024 to $222 billion by 2027 [17]

Customer Growth - As of December 31, 2024, the company had approximately 238,000 paying customers, up from 2,042 in 2022, representing a growth of 71.5% year-over-year[59] - The number of large customers increased from 2,756 in 2023 to 3,497 in 2024, indicating a growth of 26.9%[59] Financial Performance - Total revenues for the year ended December 31, 2024, were $1,669.6 million, with a significant portion derived from contracted customers[504] - Total revenue for 2024 reached $1,669,626, representing a 29% increase from $1,296,745 in 2023[512] - Gross profit for 2024 was $1,290,924, up from $989,740 in 2023, indicating a gross margin improvement[512] - Operating expenses increased to $1,445,685 in 2024, compared to $1,175,225 in 2023, primarily driven by higher sales and marketing costs[512] - The net loss for 2024 was $78,800, a significant reduction from the net loss of $183,949 in 2023[512] - The company’s stockholders' equity increased to $1,046,201 in 2024, up from $763,047 in 2023, indicating improved financial health[510] - Net loss for 2024 was $78.8 million, a decrease from $183.9 million in 2023, indicating improved financial performance[523] Cash and Liquidity - As of December 31, 2024, the company had cash and cash equivalents of $147.7 million and available-for-sale securities totaling $1,708.2 million[482] - Cash and cash equivalents increased to $147,691 in 2024 from $86,864 in 2023, reflecting improved liquidity[510] - Total cash, cash equivalents, and restricted cash at the end of 2024 was $154.2 million, compared to $91.2 million at the end of 2023[523] Investment and Expenses - The company prioritizes investment in research and development, resulting in the launch of new products that attract new customers[77] - Stock-based compensation expense rose to $338.5 million in 2024, compared to $274.0 million in 2023, indicating increased investment in employee incentives[523] - Purchases of property and equipment increased significantly to $185.0 million in 2024 from $114.4 million in 2023, suggesting expansion efforts[523] - Advertising expenses for the years ended December 31, 2024, 2023, and 2022 were $78.6 million, $57.6 million, and $43.5 million, respectively, reflecting a significant increase in marketing investment[546] Assets and Liabilities - Total assets grew to $3,301,162 in 2024, up from $2,759,767 in 2023, indicating strong asset accumulation[510] - Total liabilities increased to $2,254,961 in 2024, compared to $1,996,720 in 2023, primarily due to higher deferred revenue[510] - The allowance for doubtful accounts increased to $8.2 million as of December 31, 2024, from $6.0 million in 2023[605] Operational Efficiency - Net cash provided by operating activities increased to $380.4 million in 2024, up from $254.4 million in 2023, reflecting stronger operational efficiency[523] - The company maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion[495] Market and Risk Management - The company is exposed to market risks, including interest rate risk and foreign currency risk, but does not believe inflation has materially affected its operations[489] - A hypothetical 1% increase or decrease in interest rates would have resulted in a $12.1 million change in the market value of available-for-sale securities as of December 31, 2024[484] Sustainability and Social Responsibility - The company has committed to powering its operations with 100% renewable energy and aims to set near-term emissions reduction targets by 2025[61] - The company has provided free security services to over 425 state and local election websites through the Athenian Project during the 2024 election cycle[71] - Project Cybersafe Schools, launched in 2023, currently serves more than 131 school districts across 30 U.S. states[71] - The company emphasizes diversity, equity, and inclusion as key components of its innovation and success[94] - The company has established recruiting partnership programs to promote diversity and inclusion within its workforce[95] Intellectual Property - The company had 334 issued patents and 72 pending patent applications as of December 31, 2024, with patents set to expire between 2030 and 2044[98] Lease and Debt Management - The Company issued $1,293.8 million aggregate principal amount of 0% Convertible Senior Notes due 2026, with net proceeds of $1,274.0 million[618] - The Company issued $575.0 million aggregate principal amount of 0.75% Convertible Senior Notes due 2025, with no outstanding notes as of December 31, 2024[630]

Core Viewpoint - Cloudflare, Inc. has demonstrated exceptional performance in the tech sector, with a year-to-date stock surge of 49.2%, significantly outperforming the Zacks Internet – Software industry, which only rose by 3% during the same period [1][2]. Financial Performance - In Q4 2024, Cloudflare reported revenues of $459.9 million, reflecting a 27% year-over-year increase and surpassing the Zacks Consensus Estimate by 1.8% [3]. - Earnings per share (EPS) for the same quarter reached 19 cents, a 26.7% increase, exceeding the consensus mark by 5.6% [3]. - The number of large customers spending over $100,000 annually grew to 3,497, contributing 69% to total sales, up from 66% in the previous year [4]. - The dollar-based net retention rate improved to 111%, indicating increased spending from existing customers [5]. Growth Drivers - Cloudflare is capitalizing on strong demand in cybersecurity, AI-driven automation, and enterprise cloud adoption, with its Zero Trust security framework gaining traction [6]. - The company secured a three-year $4 million SASE contract with a major U.S. investment firm, enhancing its enterprise security position [6]. - Cloudflare's AI offerings, including Workers AI and AI Gateway, provide significant price-performance improvements, making it a key player in the evolving AI landscape [7][8]. Sales and Market Strategy - Improved go-to-market execution, driven by leadership changes and strategic hiring, has positioned Cloudflare for accelerated deal-making in 2025, with 80% of new sales hires focused on the enterprise segment [9]. - High-profile customer wins include a five-year $20 million contract with a Fortune 100 technology firm and a $13.5 million deal with a leading AI company, indicating strong enterprise adoption [10]. Profitability and Cash Flow - Operating profit for Q4 2024 increased by 69% year-over-year to $67.2 million, with an operating margin of 14.6%, reflecting a 360 basis-point improvement [11]. - Free cash flow for Q4 was $47.8 million, totaling $166.9 million for the full year, showcasing financial discipline alongside growth [11]. Future Outlook - For 2025, Cloudflare anticipates a revenue growth of 25%, projecting sales between $2.90 billion and $2.94 billion, with capital expenditures expected to be 12-13% of total revenues [12]. - EPS guidance for 2025 is set between 79-80 cents, indicating a growth of 6.7%, with further acceleration expected in 2026 [13]. Valuation Concerns - Despite strong fundamentals, Cloudflare's current valuation raises concerns, with a forward price-to-sales (P/S) ratio of 25.41, significantly higher than the industry average of 5.1 [14][15]. - This premium valuation suggests limited room for error, potentially impacting stock sustainability [15]. Conclusion - Cloudflare's impressive year-to-date performance is supported by robust revenue growth, improving profitability, and rising enterprise adoption, making it a compelling hold for long-term investors [17][18].

Core Insights - Cloudflare's stock experienced a significant decline, closing down 4.9% amid broader market concerns related to new tariffs and regulatory issues [1][2][3] Tariff Impact - President Trump announced a new 25% tariff on foreign-sourced semiconductors, which could lead to increased operational costs for Cloudflare, as the company relies on chips manufactured outside the U.S. [3][4] - The tariffs are set to potentially rise above 25% throughout the year, further impacting the company's expenses [4] Regulatory Concerns - Cloudflare is facing scrutiny over its anti-piracy protections, particularly after LaLiga blocked IP addresses associated with websites using Cloudflare's services due to piracy allegations [5][6] - The company has initiated legal action against LaLiga, raising concerns among investors about possible broader regulatory implications [6]

Group 1 - Khaveen Investments is a Macroquantamental Hedge Fund managing a globally diversified investment portfolio across various asset classes, countries, sectors, and industries [1] - The investment approach combines top-down and bottom-up methodologies, integrating global macro, fundamental, and quantitative strategies [1] - The fund serves accredited investors globally, including high-net-worth individuals, corporations, associations, and institutions [1] Group 2 - The strategic focus of Khaveen Investments is on transformative fields such as Artificial Intelligence, Cloud Computing, 5G, Autonomous & Electric Vehicles, FinTech, Augmented & Virtual Reality, and the Internet of Things [1] - The company emphasizes specialized expertise in cutting-edge technologies that are reshaping numerous industries [1]

Group 1 - The article discusses Cloudflare, Inc. (NYSE: NET) and reiterates a "buy" rating with a price target of $120, indicating a positive outlook for the company's stock performance [1] - The author emphasizes the importance of sustainable, growth-driven companies that maximize shareholder equity, aligning with the investment strategy of a family office fund led by Amrita [1] - Amrita's background includes experience in high-growth supply-chain start-ups and venture capital, highlighting her expertise in maximizing returns and user acquisition during the pandemic [1] Group 2 - The article mentions that Amrita's newsletter, The Pragmatic Optimist, focuses on portfolio strategy, valuation, and macroeconomics, aiming to democratize financial literacy [1] - The newsletter has been recognized as the Top Newsletter in Finance on popular platforms, showcasing its influence and reach in the financial community [1]

Core Viewpoint - Cloudflare has experienced a significant stock increase of 55% this year, driven by the growing demand for its AI-focused offerings [1] Company Performance - Cloudflare's revenue for 2024 reached $1.67 billion, marking a 29% increase, while non-GAAP net income rose by 53% to $0.75 per share, surpassing original guidance [4] - The number of customers generating over $100,000 in annualized revenue increased by 27%, outpacing the overall paying customer base growth of 25% [5] - The company's remaining performance obligations (RPO) grew by 36% year-over-year to $1.69 billion, indicating a robust revenue pipeline [8] AI Integration - Cloudflare has deployed GPUs across its network to enable customers to run AI workloads in the cloud, enhancing customer spending on its platform [2][6] - The Workers AI platform allows customers to build AI applications without heavy infrastructure investments, contributing to increased customer engagement [6][7] Future Outlook - The growth in RPO suggests that Cloudflare is signing more contracts than it is fulfilling, which could lead to stronger top-line growth in the future [9] - The cloud infrastructure-as-a-service market, targeted by Cloudflare's GPU-based AI services, is projected to generate $580 billion in revenue by 2030 [12] - Cloudflare's ability to deliver better-than-expected results and raise guidance will be crucial for justifying its current high valuation [10][11]