Short
Bullish on data streaming but CFLT to $15 for better risk/reward
- While I believe $NASDAQ:CFLT chart looks good and it might go to $40 after earnings in Q1 2025. But data platform infra is getting very competitive.
- First layer of competition comes from Hyperscalers like AWS, GCP and Azure which have their own variant of stream processing. Confluent had some leverage in terms of managed offering.
- I believed that company is unique, in a strong niche but stock based compensation and dilution has always been a problem.
- With volume of data, consumption based model makes sense. I liked that billing strategy over flat subscription type model as the prior one is easier to pass cost to consumers + have some margin (fixed).
Why I'm bearish on this name lately?
- I believe redpanda acquisition by Snowflake
SNOW would impede growth for $NASDAQ:CFLT massively.
- Snowflake has a moat in data warehousing, they are trying to become all things data infrastructure.
- Streaming ingestion into snowflake is a capability which could have great synergy. While I wanted to see $NASDAQ:CFLT acquisition bySNOW but it is not possible as of now in my opinion as confluent market cap is 10 billion+ which could hamper SNOW cash flows.
- Therefore, redpanda would be a better acquisition forSNOW but it will severly impact $NASDAQ:CFLT technical addressable market.
I would buy $NASDAQ:CFLT under $20 because their future business is going to be impacted materialistically.
- First layer of competition comes from Hyperscalers like AWS, GCP and Azure which have their own variant of stream processing. Confluent had some leverage in terms of managed offering.
- I believed that company is unique, in a strong niche but stock based compensation and dilution has always been a problem.
- With volume of data, consumption based model makes sense. I liked that billing strategy over flat subscription type model as the prior one is easier to pass cost to consumers + have some margin (fixed).
Why I'm bearish on this name lately?
- I believe redpanda acquisition by Snowflake
SNOW would impede growth for $NASDAQ:CFLT massively. - Snowflake has a moat in data warehousing, they are trying to become all things data infrastructure.
- Streaming ingestion into snowflake is a capability which could have great synergy. While I wanted to see $NASDAQ:CFLT acquisition by
SNOW but it is not possible as of now in my opinion as confluent market cap is 10 billion+ which could hamper SNOW cash flows. - Therefore, redpanda would be a better acquisition for
SNOW but it will severly impact $NASDAQ:CFLT technical addressable market. I would buy $NASDAQ:CFLT under $20 because their future business is going to be impacted materialistically.
Ordre annulé
- $NASDAQ:CFLT in their earning report said that they are partnering with Databricks. It will make the one sided competition even insane. This will directly fight the SNOW + $NASDAQ:CFLTif $NASDAQ:CFLT didn't partner with Databricks then this company would have limited upside. But with partnership it is fuel further growth for this company!
Price Target Updated to $45 per share!
Follow my initial post about $NASDAQ:CFLT here:
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Publications connexes
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.