Bullish on data streaming but CFLT to $15 for better risk/reward

2月10日

- While I believe 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 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 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 CFLT technical addressable market.

I would buy CFLT under $20 because their future business is going to be impacted materialistically.

2月11日

取消訂單

- 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 + CFLT

if 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 CFLT here: