Why Shares of Cloudflare Jumped This Week
Shares of Cloudflare (NYSE: NET) have jumped 19.2% from the close of trading Friday to the close on Thursday, according to data provided by S&P Global Market Intelligence, following a strong rally from tech stocks. The Federal Reserve's policy meeting gave investors enough indicators that interest rates won't be rising as much as feared, so they piled back into growth stocks once again. Cloudflare was one of the big beneficiaries.
Momentum does appear to be behind Cloudflare operationally as it launches iCloud Private Relay for Apple customers and sees tailwinds from the growth in artificial intelligence. The company's servers and edge presence could be a key to making AI products more secure and usable in the future.
Analysts at MoffettNathanson said exactly that in a research note this week, pointing out that ChatGPT's "performance and security" is done by Cloudflare. Given the early stage for AI, it's hard to know the financial impact, but I do think this could be a growth engine.
Source Fool.com
