Cloudflare’s AI innovation and sales strategy drive Goldman Sachs upgrade – Check Point Software (NASDAQ:CHKP), Cloudflare (NYSE:NET)

Yunyao Company net Shares rose on Thursday Goldman Sachs Analyst Gabriela Borges upgraded the stock to “buy” from “sell” and raised the price target to $140 from $77.

The analyst said the stock’s performance in 2024 can be almost entirely explained by the extent to which the market views each company as a platform rather than a single product.

Borges pointed to two catalysts for Cloudflare stock in 2025, including improved sales and marketing productivity cycles after two years of development to better address platform sales in the enterprise, and as Cloudflare moves away from its core edge network architecture Advantages applied to developer services, Act III products appeal to new AI inference use cases.

The price target increase reflects a multiple jump from 11x to 20x (Q5-Q8 revenue), and he raised his 2026 revenue forecast by 2% given the analyst’s views on sales productivity and the third act.

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Borges revised his 2024, 2025 and 2026 EPS estimates to $0.75, $0.90 and $1.32 from $0.75, $0.86 and $1.12 due to slight margin expansion, which he reported Maximum target multiplier.

Borges relegated Checkpoint software technology CHKP Raise price target to $207 from $204.

The analyst highlighted 2025 as a year of incremental investment for Check Point, as the new CEO will evaluate growth priorities and the company launches new SASE products. Taken together, analysts say there will be pressure on EPS growth in 2025, which the stock typically tracks. “We have an opportunity to be even more aggressive through 2026, because if Check Point succeeds in converting incremental investments into incremental revenue growth, then 10%+ revenue growth and 20%+ EPS growth will be back into the spotlight.

Borges compared Check Point to software companies with revenue growth of less than 10% and earnings per share sufficient to be valued using the price-to-earnings method. Compared to this peer group (median 2025 P/E of 17x), Check Point offers similar revenue growth (6% Wall Street forecast vs. 6% for 2025 peers), but is more consistent with the Rule of 40 (About 47 to 35).

The analyst also uses the S&P 500 as a point of comparison: The S&P 500 is trading at 22 times 2025 earnings per share, with earnings per share growing about 10%; relative to the S&P 500, Check Point provides a similar Profitable growth across cycles.

Borges revised 2024, 2025 and 2026 earnings per share from $9.10, $9.75 and $10.95 to $9.10, $9.45 and $10.65 to reflect operating expense trends consistent with recent history and proposed 2027 earnings per share The gain is $12.25.

Price Action: As of Thursday, NET shares were up 4.59% at $112.62. CHKP fell 0.80%.

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