The AI Revolution: A $631 Billion Opportunity Unfolds
The global artificial intelligence market has reached a staggering $235 billion, and it’s only just getting started. According to IDC, spending on AI and generative AI is expected to skyrocket to $631 billion by 2028, presenting a massive opportunity for investors. While companies like Nvidia, Palantir, and Oracle are well-known players in the AI space, one company is quietly making waves: Cloudflare.
Best known for its cybersecurity expertise, Cloudflare is now making a concerted push into the AI market. Its Workers AI platform, launched last year, allows developers to run AI inference applications on Cloudflare’s network, leveraging Nvidia’s GPUs and networking switches. With GPUs deployed across 180 cities globally, Cloudflare is poised to dominate the infrastructure-as-a-service (IaaS) market, projected to reach $580 billion by 2030.
But that’s not all. Cloudflare’s new AI Audit tool enables websites and content creators to track and control AI bot access, opening up new revenue streams. As generative AI adoption grows at an annual rate of 31% over the next decade, Cloudflare is well-positioned to capitalize on this trend.
The company’s impressive Q2 2024 results, with 30% year-over-year revenue growth and doubled earnings, demonstrate its ability to drive growth through customer adoption. With a dollar-based net retention rate of 112%, Cloudflare is successfully upselling its services to existing customers. Analysts expect the company’s earnings to increase at an annual rate of 62% over the next five years, making it an attractive growth stock.
Before investing, consider the Motley Fool’s Stock Advisor service, which has more than quadrupled the return of the S&P 500 since 2002. While Cloudflare wasn’t one of the top 10 stocks recommended by the analyst team, the service provides a blueprint for success, including guidance on building a portfolio and regular updates from analysts.
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