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JFrog Can Become 'System of Record' for Software Development in AI Era, RBC Says

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JFrog (FROG) has the unique potential to become a "system of record" in the AI era as a hub for software packages, container images, libraries, and artificial intelligence / machine learning models needed for software development, RBC Capital Markets said in a Tuesday note initiating coverage of the company's stock.

JFrog's universal binary management platform is in a crucial position within the enterprise software supply chain, RBC analysts said. As code generation accelerates due to AI, JFrog's core product Artifactory becomes essential as binary volumes need to be stored, secured, governed, and distributed, the analysts noted.

The company's Q2 cloud revenue rose 53% from a year ago and now makes up 53% of total revenue, with customers using more than the minimums stipulated due to AI-driven advancements, the firm said. This could result in more customers signing higher committed contracts, which would provide near-term benefit and long-term predictability, according to the note.

JFrog's Curation product faces limited competition in the software supply chain security space and is seeing fast uptake as supply chain attacks make it essential, the analysts said.

RBC initiated coverage of the company's stock with a rating of outperform and a price target of $118.

Price: $92.33, Change: $+2.85, Percent Change: +3.19%

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