TD Cowen has elevated JFrog to the top of its small- and mid-cap software ideas list, arguing that the company is benefiting from meaningful artificial intelligence tailwinds and a solid competitive position in the enterprise software market.
In a note highlighting the name as its best SmidCap idea, the investment firm points to demonstrated AI-driven growth over the past year. TD Cowen says that the rise of coding agents has materially increased the creation of software packages, producing persistent demand dynamics that favor JFrog’s platform.
The firm expects notable upside to cloud forecasts and continues to emphasize the company’s security capabilities, particularly its curation features, as a source of strength. TD Cowen further contends that JFrog can retain a premium valuation multiple if it sustains growth above 20 percent and remains an AI beneficiary.
Investor sentiment toward JFrog has shifted markedly over the past two years as the company consistently beat and raised expectations, a pattern TD Cowen notes alongside strong share price performance. The stock has risen 112 percent in 2025, is up 30 percent year-to-date, and has gained 210 percent from its August 2024 low.
Undervalued or underappreciated drivers
TD Cowen lists several factors it believes remain underappreciated by the market. First, the firm considers the acceleration observed so far to be an initial phase driven by experimentation with coding agents, with much of the activity not yet moving into production. As models mature, TD Cowen anticipates a jump in production binaries - software artifacts that will require both storage and updates - which should benefit JFrog’s offerings.
Second, the firm notes that numerous customers have already surpassed their committed usage levels, producing cloud upside that could translate into larger future commitments and a higher net revenue retention floor. TD Cowen expects net revenue retention to eventually exceed 120 percent, compared with the current 118 percent that management cites in its guidance.
Third, the firm argues that growth related to curation should prove durable because customer adoption is broad-based rather than being driven by a small number of high-profile security incidents.
Operational metrics and positioning
JFrog’s platform supports more than 35 programming languages, a capability TD Cowen highlights as a competitive advantage as coding agents increasingly employ diverse languages. The firm emphasizes that this breadth enhances the company’s relevance as automated coding tools proliferate.
Cloud revenue growth accelerated to 45 percent last year from 41 percent in fiscal 2024, while total revenue increased 24 percent versus 22 percent in the prior period. With a market capitalization around $10 billion, TD Cowen views JFrog as a core holding for growth-oriented investors seeking exposure to software names benefiting from AI momentum.
Recent results and analyst developments
In recent disclosures, JFrog reported revenue that outpaced consensus by 4.4 percent, with billings rising 24 percent year-over-year. The company has also attracted renewed broker attention: Benchmark initiated coverage with a Buy rating, and UBS raised its price target, citing improving cloud usage trends.
TD Cowen’s recommendation rests on the coexistence of practical AI tailwinds, accelerating cloud adoption metrics, and sustained security curation traction. The firm expects these factors to underpin upside to cloud estimates and support premium multiple retention if growth remains above 20 percent.