By C3.ai, Cloudflare, and DigitalOcean Holdings stocks saw an upgrade recently, thanks to the bright outlook for artificial intelligence (AI) as a catalyst for growth.
Upgraded Stocks
Oppenheimer analyst Timothy Horan has upgraded the following stocks:
- C3.ai (ticker: AI)
- Cloudflare (NET)
- DigitalOcean (DOCN)
The upgrades, from Perform to Outperform, were made in light of accumulating evidence that AI can result in significant revenue sources and productivity improvements.
Price Target for C3.ai
Horan has set a price target of $40 for C3.ai stock, representing a 43% increase from its previous closing price. One of the reasons for this optimistic outlook is the fact that C3.ai is one of the few pure-play AI stocks and is experiencing high demand.
C3.ai’s Positive Forecast
In September, C3.ai announced its expectation of achieving cash flow positivity in the fourth quarter of fiscal 2024 and fiscal 2025. However, it is worth noting that C3.ai is presently investing in generative AI and does not anticipate non-GAAP profitability until the fourth quarter of fiscal 2024.
Market Performance
On Tuesday, C3.ai stock rose by 5% to reach $29.45. In 2023 alone, the stock has experienced an impressive surge of 163%. This surge is part of a broader trend where stocks with AI exposure have witnessed significant gains due to investor excitement surrounding the technology’s potential impact on these companies. However, it’s important to mention that the stock has receded by 36% since reaching a 52-week closing high on June 15.
Cloudflare Stock Receives Positive Outlook
Cloudflare stock received a positive outlook from analyst Horan, who set an $85 price target for the company. In his analysis, Horan emphasized Cloudflare’s partnership with major technology companies and the deployment of AI infrastructure on its Workers AI platform.
Horan noted that despite being less than two months old, the Workers AI platform is already experiencing strong demand from both small start-ups/developers and large enterprises. This trend bodes well for Cloudflare’s future growth and success.
Currently, Cloudflare shares are trading at $74.13, a 1.8% increase, and are on track for their highest close since August 2022. The stock has seen a significant rise of 64% this year, outperforming customer-spending headwinds caused by high interest rates and inflation.
In addition to Cloudflare, Horan also expressed confidence in DigitalOcean stock, giving it a $37 price target. He highlighted the strong demand for artificial intelligence and predicted a surge in enterprise adoption.
Previously, Horan had a Perform rating on DigitalOcean shares, citing uncertainties in the economy and restricted access to capital markets as key concerns. However, with the potential decrease in interest rates on the horizon, he now sees these challenges as a thing of the past.
As of now, DigitalOcean stock is trading at $28.86, reflecting a 0.9% increase. Since the beginning of the year, shares have risen by 13%.
In conclusion, the positive outlook from Horan indicates a promising future for both Cloudflare and DigitalOcean stocks. Investors can expect continued growth and success in these companies as they navigate evolving market conditions and capitalize on the increasing demand for AI technology.
Comments