As warm air rises and cools. Warm air holds more water than cold air due to respective expansive and contraction properties of gases. The flat bottom you see is called the Lifting Condensation Line or LCL. Once air reaches this level it cools slower due to latent heat given off by the change of state from vapor to liquid. Above the LCL gathered water droplets cause chaos as they continue to rise and crash into each other. Puffy clouds or Cumulus clouds are usually riding a cold front. When the cold front hits warmer air it acts as a wedge and plows up the warm air to higher altitude, the difference between the cold front and warm front is called a pressure gradient. The bigger the gradient the bigger the clouds and more severe the storm by forcing the warm air higher.
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