Cloudflare Eyes Growth From Artificial Intelligence Investments

From a technical view, NET stock owns a 76.07 buy point from a consolidation. For more aggressive investors, there's a lower 66.24 buy point — the Nov. 7 high. NET stock has cleared resistance in the 66 trading area. A 5% buy zone extends to 69.55.

Started in 2009, Cloudflare speeds up and provides security for web applications routed through its intelligent global network. When the company released third-quarter earnings for NET stock on Nov. 2, management updated analysts on its AI infrastructure plans.

NET Stock: Deploying Nvidia AI Chips
As of Oct. 31, Cloudflare told analysts it had deployed "inference-optimized" Nvidia (NVDA)-made GPUs in 75 cities. It plans to deploy the Nvidia chips in 100 cities by the end of 2023.

In 2024, Cloudflare aims to deploy the Nvidia AI chips in 300 locations worldwide. The AI networking cards are simply plugged into computer server PCI slots, lowering capital spending needs.

Cloudflare Q3 Earnings Beat
In addition, Cloudflare has set a long-term goal of $5 billion in annual recurring revenue, or ARR, from subscription-based services. Its 2022 revenue stood at $975.2 million.

Cloudflare earnings for the quarter ending Sept. 30 were 16 cents a share, up 166% from 6 cents a year earlier.

Revenue climbed 32% to $335.6 million, the San Francisco-based company said. Analysts predicted profit of 10 cents a share and revenue of $330.5 million.

In Q3, Cloudflare said it added 206 new large customers that spend more than $100,000 annually. It ended the quarter with 2,558 large customers, up 34% from a year earlier.

Price Momentum
NET is trading near the top of its 52-week range and above its 200-day simple moving average.

What does this mean?
Investors have been pushing the share price higher, and the stock still appears to have upward momentum. This is a positive sign for the stock's future value.