Key insights
- The recent US executive order on AI is expected to boost demand for AI-powered cybersecurity solutions, benefiting companies like Cloudflare. Cloudflare's strong revenue growth, CEO's positive outlook on AI as a major tailwind, and strategic partnerships position it well. Recent staff reductions attributed to AI efficiency further highlight operational adjustments. Technically, the stock shows a strong breakout, suggesting bullish momentum. This confluence of factors indicates a positive outlook for Cloudflare and potentially the broader cybersecurity sector within the tech industry.
The AI executive order signed June 2 pushes the government and critical infrastructure like utilities, hospitals, banks to go buy AI-powered cyber defense, and drags Washington and the AI labs into the same room.
In bull markets its important to keep it stupid simple. Line up fundamentals and a story with Flows and Technicals and tight risk management. Cybersecurity relative to software is in a strong uptrend. Most names have run but not Cloudflare. In a bull market laggards tend to catch UP to leaders.
Revenue +34% YoY to record highs, CEO openly calling AI the biggest tailwind in company history, and they’re building secure sandboxes for Anthropic’s agents and will be paid as the agent economy scales. Best part is they cut ~20% of staff (1,100 roles) and pinned it on AI doing the work.
Technicals: clean breakout from a multi-month base to new highs. Very clean stop below 250. I love it when people are like “its extended” or its run up a lot and is due for a pullback. Lol gamma squeezes everywhere. Risk is to the upside right now.
Psychology: If you are up bigly this year, play offense. If not then only try to enter this trade on pullbacks.