Cloudflare's Developer And AI Tools Fuel Long-Term Growth: Goldman Sachs Analyst Says

Core Viewpoint - Goldman Sachs analyst Gabriela Borges maintains a Buy rating on Cloudflare, Inc with a price target of $161, emphasizing the significant opportunity in AI inference and its rapid ramp-up potential [1] Group 1: Financial Projections - Analyst estimates that Act III products will generate$ 80 million in Annual Recurring Revenue (ARR) in 2024, with a potential growth to $1.3 billion by 2030, reflecting a 60% Compound Annual Growth Rate (CAGR) [2] - Borges projects fiscal 2025 revenue of$ 2.09 billion and Earnings Per Share (EPS) of $0.81 [4] Group 2: Capital Expenditure and Growth Indicators - Cloudflare guided capital expenditures (capex) to be 12-13% of revenue, indicating a ~40% increase due to investments in GPU rollout for AI inference demand [3] - The annual contract value (ACV) for Act III products increased by 76%, suggesting acceleration in growth, with plans to double global computing capacity this year [3][4] Group 3: Market Sentiment and Stock Performance - BofA Securities analyst Madeline Brooks also upgraded Cloudflare to Buy, raising the price target to$ 160, driven by growth in AI-as-a-Service and network security [5] - Despite positive analyst sentiment, NET stock closed lower by 4.98% to $121.15 on Wednesday [5]