Bernstein analysts initiated coverage of Confluent (NASDAQ:CFLT) with an Outperform rating and a price target of $34 per share. Shares jumped more than 8% intra-day today.

The analysts described Confluent as an appealing revenue story, benefiting from the ongoing adoption of cloud technologies. They emphasized the company’s strong competitive position in relation to both major cloud providers (hyperscalers) and new market entrants.

The analysts highlighted Confluent’s significance in the cloud sector, particularly its status as the premier provider of self-hosted and managed Kafka services. Kafka, being the leading open-source standard for real-time message buses, is a critical architectural component for both hybrid and native cloud environments.

Additionally, Bernstein sees potential for an upside in Confluent’s stock due to several revenue-related controversies that could surpass consensus expectations. Furthermore, controversies surrounding cash flow are also viewed as factors that could contribute to the company’s upside.

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