In my search for small and mid-cap stocks that could benefit from the AI megatrend, the company $FROG (+2,27%)
caught my eye.
I myself am currently (yet) but would like to briefly introduce this exciting company to you.
It may also be of interest to your watchlist. 👀
Industry sector: DevOps / AI / Security
Market capitalization: approx. USD 5 billion
📍 What does JFrog do?
JFrog provides a platform for automated software delivery - from development to operation. It manages so-called artifacts (i.e. software packages, containers, AI models) and automates the entire delivery process. Companies use JFrog to deliver software faster, more securely and more consistently - whether in the cloud, on-premises or at the edge.
The goal: software should be delivered as smoothly as data - which is why JFrog calls its concept "Liquid Software".
🧠 How does JFrog use artificial intelligence?
JFrog itself is not a classic "AI company" - but AI is central to two things:
Security & Automation:
JFrog uses AI-powered analysis to automatically detect and assess vulnerabilities in software - even in complex open source stacks.
Deployment of AI models:
Many customers use JFrog to deploy their own AI models automatically and securely securely into production. This makes JFrog the infrastructure behind modern AI.
📈 Growth & momentum
- Q2 2025 revenue: USD 127.2 million → +23% YoY
- Cloud revenue: +45 %
- Customer loyalty (net dollar retention): 118%
- 61 major customers with sales of over USD 1 million - +45% year-on-year
JFrog is operationally profitable with a gross margin of 83% and a free cash flow margin of 28
The balance sheet is debt-free, with over USD 600 million in cash reserves - a stable basis for further growth.
📊 Valuation & market sentiment
The share is valued at a forward P/E ratio of approx. 61 and a sales multiple of around 9.
This is ambitiousbut is well underpinned by growth, margins and market position. The share price rose significantly after the last quarterly figures - there is technical momentum.
📍 Opportunities & risks
Opportunities:
- Important building block in DevOps and AI infrastructures
- High cloud share with strong growth
- High customer loyalty & strong cash flow
Risks:
- Valuation challenging
- Competition from GitLab, GitHub, AWS & Co.
👉 Conclusion
JFrog is not a short-term AI hype, but a strategically positioned company with real applications in the AI and software world.
Anyone looking to invest in the infrastructure behind modern software development - with a focus on automation, security and scalability - will find an exciting mid-cap with substance here.
📈 Current chart (as at August 8, 2025)
Brief summary (weekly chart)
- Trend: Higher lows/highs since 2022 → medium-term upward trend.
- Key resistance: USD 45-47 (multiple tops).
- Dynamic supports:
- ~37 USD ≈ rising 50-week SMA
- 29-31 USD ≈ 200-week SMA + volume base
Possible entry zones
Break-out buy: Weekly close > 47 USD → Target 55-60 USD, stop < 42 USD.
Pullback buy: Setback to the zone 35-38 USD (50-W-SMA) with bullish reaction.
USD 29-31 as "last-defense" support from the bottom formation.
ℹ️ Of course only a brief technical assessment, not investment advice.
