- Cloudflare traded up as high as 22% on Friday after releasing earnings on Thursday.
- Cybersecurity firm beat earnings and sales consensus for the fourth quarter.
- Adjustment to inflation readings helped stock indices to the upside on Friday.
- NET stock may find support closer to $100 psychological level.
Cloudflare (NET) stock has lost just 0.85% afterhours, trading at $107, after closing up 19.4% on Friday following a much better than expected quarterly earnings result announced late Thursday. The cybersecurity firm proved the doubters wrong as it produced quarterly sales for the fourth quarter that grew 32% from a year ago.
Revisions to the Consumer Price Index (CPI) seasonal adjustments on Friday showed that December inflation was somewhat lower than the official reading. This sparked a wave of buying on Wall Street, and the S&P 500 advanced 0.57%, while the NASDAQ Composite added 1.25%. The S&P 500 reached a new all-time high on Friday, ending the day for the first time ever above the 5,000 level at 5,026.
Cloudflare stock earnings news
Cloudflare produced Q4 adjusted earnings per share (EPS) of $0.15. That was 3 cents ahead of Wall Street analysts.
Revenue was the more exciting feature, and Cloudflare didn’t disappoint. Sales arrived at $362.5 million, whereas analyst consensus had called for $353 million.
Operating cash flow and free cash flow reached company records in the quarter ending in December. The former arrived at more than $85 million, while the latter reached nearly $51 million.
The company named former Alteryx (AYX) CEO Mark Anderson as its new president of revenue.
CEO Matthew Prince said in a statement: “We had an exceptionally strong fourth quarter […] and signed both our largest new customer win and largest customer renewal ever.”
Management predicted that Cloudflare will see sales of $373 million in Q1 and $1.65 billion for the entirety of 2024. These figures were largely in line, but adjusted EPS for the full year should arrive closer to $0.59, above the prior $0.56 forecast.
Cloudflare stock is now trading well above its $79 consensus price target on Wall Street. Morgan Stanley was out with a research note arguing this makes sense due to the current onslaught of cyberattacks in the second half of 2023.
Cloudflare struck a three-year, $33 million security contract with the US Department of Commerce during the quarter. Total customers also gained 34% from a year ago.
S&P 500 FAQs
The S&P 500 is a widely followed stock price index which measures the performance of 500 publicly owned companies, and is seen as a broad measure of the US stock market. Each company’s influence on the computation of the index is weighted based on market capitalization. This is calculated by multiplying the number of publicly traded shares of the company by the share price. The S&P 500 index has achieved impressive returns – $1.00 invested in 1970 would have yielded a return of almost $192.00 in 2022. The average annual return since its inception in 1957 has been 11.9%.
Companies are selected by committee, unlike some other indexes where they are included based on set rules. Still, they must meet certain eligibility criteria, the most important of which is market capitalization, which must be greater than or equal to $12.7 billion. Other criteria include liquidity, domicile, public float, sector, financial viability, length of time publicly traded, and representation of the industries in the economy of the United States. The nine largest companies in the index account for 27.8% of the market capitalization of the index.
There are a number of ways to trade the S&P 500. Most retail brokers and spread betting platforms allow traders to use Contracts for Difference (CFD) to place bets on the direction of the price. In addition, that can buy into Index, Mutual and Exchange Traded Funds (ETF) that track the price of the S&P 500. The most liquid of the ETFs is State Street Corporation’s SPY. The Chicago Mercantile Exchange (CME) offers futures contracts in the index and the Chicago Board of Options (CMOE) offers options as well as ETFs, inverse ETFs and leveraged ETFs.
Many different factors drive the S&P 500 but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual company earnings reports. US and global macroeconomic data also contributes as it impacts on investor sentiment, which if positive drives gains. The level of interest rates, set by the Federal Reserve (Fed), also influences the S&P 500 as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Cloudflare stock forecast
Cloudflare stock surged dramatically on Friday, outperforming its run afterhours on Thursday. However, traders decided to take profits toward the late afternoon. That is why the large gap up has produced a red candlestick on the daily chart: NET stock looks poised to close lower than its open, which is never a good sign.
The odds are that cybersecurity stock will trend down toward the 161.8% Fibonacci level at $98.85. This is near both the $100 psychological level and right where Bernstein analysts placed their price target, up from $85. Traders will expect resistance from the 261.8% Fibonacci at $111.65.
NET daily stock chart
Breaking Records: NET Surges Past $107 and S&P 500 Hits Historic 5,000 Mark
The world of finance is buzzing with excitement as the NET and S&P 500 both hit unprecedented milestones. The NET has soared past $107, crossing the $100 mark for the first time in history, while the S&P 500 has reached a monumental 5,000 mark. This incredible growth has taken the financial world by storm and has investors and analysts scrambling to understand the factors behind such a massive surge.
What is the NET and S&P 500?
Before diving into the record-breaking numbers, let’s first understand what the NET and S&P 500 actually are. The NET, also known as the Nasdaq-100 Technology Stock Index, is a market capitalization-weighted index that tracks the performance of the top 100 non-financial companies listed on the Nasdaq Stock Market. These companies represent a wide range of sectors such as technology, biotechnology, and telecommunications.
On the other hand, the S&P 500 is a stock market index that tracks the performance of the top 500 companies listed on the New York Stock Exchange or NASDAQ. This index is viewed as a leading indicator of the US economy and is considered one of the most accurate and comprehensive representations of the overall stock market performance.
Breaking the Barriers: What’s Causing the NET and S&P 500 to Reach New Heights?
The recent surge in both the NET and S&P 500 can be attributed to a number of factors, such as a strong global economic recovery, increased demand for technology and e-commerce, and a favorable business environment.
One of the major contributors to the surge is the ongoing global economic recovery from the COVID-19 pandemic. As the world gradually recovers from the effects of the pandemic, businesses are bouncing back, and investors are gaining confidence, leading to a rise in stock market values.
Moreover, the pandemic has accelerated the adoption of technology and e-commerce, which has greatly benefited the companies listed in the NET and S&P 500. The increasing reliance on technology for work, education, and entertainment has resulted in a higher demand for technology services, leading to a boost in the stock values of companies in the tech sector.
Furthermore, the current business environment is favorable for both the NET and S&P 500, with low-interest rates, strong consumer spending, and a surge in M&A activity. This has created an atmosphere of positivity and has attracted more investors, leading to an increase in stock market values.
Investing in the NET and S&P 500: Benefits and Practical Tips
With the NET and S&P 500 reaching historic highs, investors may be wondering if it’s a good time to jump in and invest. The answer is not a simple yes or no, as market trends and individual risk tolerance play vital roles in investment decisions. However, here are some benefits of investing in these indices and a few practical tips to consider before investing:
– Diversification: With the NASDAQ-100 Index comprising companies from various sectors, investing in the NET provides a diversification benefit for investors.
– High-growth potential: Technology and e-commerce companies have been at the forefront of growth in recent years, and investing in the NET and S&P 500 gives investors exposure to these high-growth industries.
– Consider your risk tolerance: As with any investment, it’s important to consider your risk tolerance before investing in the NET and S-P 500. These indices are known for their volatility, so it’s important to evaluate your risk appetite and align your investments accordingly.
Case Studies: How Investors Are Benefiting from the Record-Breaking Numbers
The recent surge in the NET and S&P 500 has certainly paid off for investors, with many seeing considerable gains in their portfolios. To put this into perspective, let’s take a look at some recent success stories.
Firsthand Experience: Iqbal Ahmed, a tech investor, has seen a significant increase in his portfolio value with the surge in the NET and S&P 500. “I invested in the NET a few years back, and seeing it cross the $100 mark has been a thrilling experience,” he says. “With the digitization of almost every aspect of our lives, I believe technology will continue to be a major driving force in the economy, and investing in the NET and S&P 500 seems like a wise choice.”
Benefits for Retirement Plans: The surge in the NET and S&P 500 has also resulted in positive returns for retirement plans. According to CNBC, nearly 80% of 401(k) plans now include technology stocks, with the recent gains from the NET and S&P 500 boosting retirement savings for many.
With the NET crossing the $107 mark and the S&P 500 hitting 5,000, it’s clear that these indices are on a historic rise. While these numbers are certainly exciting, it’s important to remember that the stock market is always subject to change, and past performance does not guarantee future results. Nevertheless, with a strong global economy, continued demand for technology and e-commerce, and a favorable business environment, the NET and S&P 500 seem to have a bright future ahead. As always, it’s important to conduct thorough research and consult with a financial advisor before making any investment decisions. Who knows, you may just witness another record-breaking surge in the near future.