This Super Artificial Intelligence (AI) Stock Could Be at the Beginning of a Terrific Bull Run

Investors have been buying artificial intelligence (AI) stocks hand over fist, which helps explain why shares of Cloudflare (NYSE: NET) have shot up an impressive 40% in the past three months. And the company’s latest quarterly results suggest that its red-hot rally is here to stay.

Cloudflare stock shot up 20% the day after it released its fourth-quarter and full-year 2023 results on Feb. 8. Investors liked the company’s better-than-expected numbers and the solid outlook that points to robust growth ahead.

Let’s take a closer look at Cloudflare’s latest results and see how AI is having a positive impact on the company’s growth.

Cloudflare customers are spending more money on its solutions

Cloudflare’s fourth-quarter revenue increased 32% year over year to $362 million, exceeding the consensus estimate of $353 million. The company’s full-year revenue was up 32% to $1.3 billion.

Cloudflare’s adjusted earnings saw a significant jump as well, increasing from $0.06 per share in the year-ago period to $0.15 per share, and exceeding the $0.12 per share consensus estimate. Full-year earnings increased to $0.49 per share from $0.13 in 2022.

Cloudflare, which provides cloud-based internet infrastructure services that speed up internet connections while improving performance, security, and reliability, delivered stronger-than-expected growth thanks to robust customer spending, as well as an increase in its customer base.

Cloudflare ended the fourth quarter of 2023 with 189,000 paying customers, up 16% from the year-ago period. However, it is worth noting that Cloudflare gets more than 60% of its top line from large customers who have generated more than $100,000 in annualized revenue for the company. The company finished 2023 with 2,756 of these large customers, an increase of 35% over the prior year.

What’s more, the number of customers with annualized revenue of more than $500,000 increased at an even faster pace of 56%. There was a nice year-over-year jump of 39% in the number…