Cloudflare Stock Jumps On Goldman Sachs Double Upgrade, Price Target Hike: Retail Ecstatic
Goldman Sachs analyst Gabriela Borges highlighted “several positive catalysts” for Cloudflare’s future success, citing improved sales and marketing productivity as a key driver.
FollowCloudflare Inc. (NET) stock surged over 5% in midday trading on Thursday after Goldman Sachs issued a double upgrade on its shares.
The brokerage revised its rating to ‘Buy’ from ‘Sell’ and nearly doubled the price target from $77 to $140, citing expectations of significant growth in 2025 driven by operational improvements and new market opportunities, as per TheFly.
Goldman Sachs analyst Gabriela Borges highlighted “several positive catalysts” for Cloudflare’s future success, citing improved sales and marketing productivity as a key driver.
The research note pointed to improvements from changes spearheaded by Marc Boroditsky, the former Chief Revenue Officer of Twilio and Okta, who joined Cloudflare in November 2022.
Boroditsky introduced a revamped go-to-market strategy in early 2023, designed to better position Cloudflare’s platform for enterprise adoption.
Goldman Sachs cited industry conversations suggesting that artificial intelligence is moving more materially from training to inferencing use cases, consistent with Cloudflare's third-quarter (Q3) comments.
At its core, the analysts argued, Cloudflare has built “a unique globally distributed cloud platform” that offers a range of network services to businesses.
“This architecture allows new products to be deployed at low incremental cost and monetized at high incremental margin,” the analysts wrote.
Goldman believes Cloudflare will see success as it rolls out developer services and production environment tools, with a path to monetization becoming “more tangible.”
On Stocktwits, retail sentiment around Cloudflare’s stock flipped to ‘extremely bullish’ from ‘bearish’ a day ago, as chatter surged to ‘extremely high’ levels.
One user expects other brokerages to follow suit after Goldman Sachs’ upgrade.
https://stocktwits.com/The_Reaper/message/598520907
Others predicted that it’s going be a bullish year for the stock.
https://stocktwits.com/eddyborja/message/598572382
https://stocktwits.com/Dostovy/message/598526527
Despite the optimism, analysts noted competitive risks from hyperscalers with larger resources and networks.
They also flagged potential vulnerabilities related to service outages, referencing a significant June 2022 incident that temporarily disrupted major websites like Shopify and Coinbase.
Cloudflare's stock performance in 2024 was tepid, ending the year down nearly 2%.
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Read also: Kopin Stock Pops On ‘Buy’ Rating From Canaccord: Retail Remains Undecided
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