Cybersecurity firm Cloudflare (NET) has received a rare double upgrade from Bank of America Securities (BAC).
Analyst Madeline Brooks wrote in a note to clients that Cloudflare is likely to attract new customers as they seek the benefits of artificial intelligence (AI) without having to build their own infrastructure. Brooks upgraded NET stock to a Buy rating from a previous Sell-equivalent underperform rating. She also raised her price target on the stock to $160 from $60.
Shares of Cloudflare rose as much as 4% immediately after the double upgrade was made public. Brooks’ new price target is about 27% higher than where Cloudflare’s shares currently trade. NET stock has risen 18% this year and nearly 30% over the last 12 months.
AI-as-a-service
Bank of America sees Cloudflare becoming “the leader in AI-as-a-service,” which the Wall Street firm expects to become the preferred method of accessing AI among businesses. AI-as-a-service is a cloud-based model that allows clients to integrate AI tools into their systems without investing in infrastructure themselves.
Analyst Brooks says a recent Bank of America survey found that AI is the leading product Cloudflare customers are looking to adopt over the next 12 months, and adds that Cloudflare is the company of choice among cloud giants such as Amazon (AMZN) and Oracle (ORCL). Cloudflare’s strength in network security should add to the momentum in its stock, wrote Brooks.
Is NET Stock a Buy?
The stock of Cloudflare has a consensus Moderate Buy rating among 27 Wall Street analysts. That rating is based on 14 Buy, 12 Hold, and one Sell recommendations issued in the last three months. The average NET price target of $155.83 implies 22.65% upside from current levels.
