Cloudera: Connected Devices, AI and Machine Learning
01/24/2018 5:00 am EST
First it is important to understand the backdrop of why Cloudera is such an exciting company. Remember, understanding the big picture of what the company is doing is how you build real confidence in your investments.
Everything right now is going through a major technological revolution. Look what is happening in cars, health, and virtual reality. Everything is getting connected. This newly-created connected world is creating a backdrop for data that is unprecedented.
And in this area of the economy is where the world’s most valuable companies reside—Apple (AAPL), Google (GOOGL), Facebook (FB) and Amazon (AMZN). They are all data driven. Economists say the world’s most valuable resource is now no longer oil, but data.
So where does Cloudera fit it? Cloudera helps enterprises enter this new world of machine learnings and artificial intelligence. Cloudera gives them access to this data to transform their business to become data dependent.
The old days of just working with a database storage provider and some simple analytics are gone. Today, companies turn to Cloudera to build best-in-class artificial intelligence solutions that optimize all the available data out there, not just their own.
Machine learning and artificial intelligence are megatrends for the next 5 years. Get involved. Cloudera is a great opportunity. Revenue will explode from $360 million this year to $570 million in 2 years. We see Cloudera breaking the $1 billion revenue mark possibly as early as 2020.
We added the stock at $22 in June so it has certainly been an underperformer for us. But we are very confident in the success of this company and continue to have a $28 price target on the stock.
Sometimes one has to be patient to see the big gains that we expect. Cloudera is still tiny with a market cap of $2.5 billion. But they are growing 40% a year.
We would expect to see this little gem grow to the $10 billion level at some point and then get plucked up by one of the big boys. And this might even happen sooner than you think.