We recently published a list of Top 10 AI News You Shouldn’t Miss. In this article, we are going to take a look at where Cloudflare, Inc. (NYSE:NET) stands against other top AI news you shouldn’t miss.
All everyone could talk about in the technical AI landscape these days is DeepSeek-R1, a Chinese open-source LLM that analysts believe can give major American AI companies a run for their money. Why is DeepSeek making waves and why is it called a breakthrough in the AI race?
DeepSeek AI model is several times cheaper to use for professional purposes when compared to its American counterparts including OpenAI’s o1 model. Media reports also suggest the model beat almost all key AI models in the industry by significant margins.
CNBC’s Deirdre Bosa explained what makes these Chinese models a challenge for US tech companies:
“The cost, I mean, these models coming out of China are just built at a fraction of the price when you think about OpenAI. That’s spending $5 billion a year, burning through billions of dollars a year. These models, the DeepSeek for example, they say they built it for less than $6 million. ByteDance as well, you know, shows that it was built and you can access it at much, much lower prices. So, this really turns on sort of this truth that we have thought about generative AI for the last few years—that you need hundreds of millions of dollars to develop bigger and better models. What the Chinese labs and companies are doing is they’re going straight to the frontier. They’re building with sort of infrastructure and outputs that are already out there, built in many cases by American companies and startups, and they’re improving on it, they’re innovating on it, and producing models that are just as good, in some cases, at a fraction of the cost.”
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For this article, we picked 10 AI stocks currently in the news. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a server array powering a cloud-services system.
Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Investors: 44
Cloudflare, Inc. (NYSE:NET) recently gained after Goldman Sachs upgraded the stock from Sell to Buy.
The investment firm projects a 28% upside, setting its new 12-month price target at $140.
Goldman Sachs identified two key factors driving Cloudflare, Inc. (NYSE:NET) potential in 2025: “an improving sales and marketing productivity cycle after two years of evolution to better address platform sales in the enterprise, and traction with Act III products for developer services, as Cloudflare, Inc. (NYSE:NET) applies its core edge network architectural advantages (being able to run software workloads on all commodity servers, points of presence across telcos) to new AI inferencing use cases,” said Goldman Sachs analysts, led by Gabriela Borges, in an in-depth investor note on U.S. cybersecurity stocks.
Goldman Sachs also noted that chief information officers view platform investment as a top priority for cybersecurity.
Parnassus Mid Cap Fund stated the following regarding Cloudflare, Inc. (NYSE:NET) in its Q3 2024 investor letter:
“In Software, we added Autodesk and Cloudflare, Inc. (NYSE:NET) while exiting Bill.com. Cloudflare has built its own internet network, providing its customers with lower latency and better security. Cloudflare allows companies to access the internet faster and with greater security. The company is building new offerings on top of its network, allowing it to widen its competitive moat with high incremental margins. Cloudflare has a large addressable market that we believe provides a long runway for growth.”
Overall, NET ranks 9th on our list of top AI news you shouldn’t miss. While we acknowledge the potential of NET, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
