What Happened?
Shares of cloud security and performance company Cloudflare (NYSE:NET) jumped 2.6% in the afternoon session after investor enthusiasm for the artificial intelligence sector regained momentum, fueled by gains in industry leaders like Nvidia and Micron.
This "AI-boost" acted as a primary catalyst, helping the S&P 500 approach the historic 7,000 level during the shortened holiday week. This upward trend built upon Cloudflare’s robust fundamental performance. In its most recent quarter, the company reported $562.03 million in revenue, a 30.7% year-over-year increase, with earnings per share rising to $0.27.
After the initial pop the shares cooled down to $201.76, up 3.1% from previous close.
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What Is The Market Telling Us
Cloudflare’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 20 days ago when the stock gained 4.2% on the news that Barclays initiated coverage on the company with an Overweight rating and a $235 price target.
The new rating suggested strong confidence in the cloud security company's future. Analysts at the firm highlighted Cloudflare's vast network, which supported a significant portion of the internet, as a major strength. They projected that the company's revenue was positioned to grow between 27% and 30% annually through 2028. This growth was expected to be fueled by a diverse range of products and an expanding share of the market. The price target of $235 represented a notable premium over the stock's previous closing price.
Cloudflare is up 79.3% since the beginning of the year, but at $201.76 per share, it is still trading 20.3% below its 52-week high of $253.30 from October 2025. Investors who bought $1,000 worth of Cloudflare’s shares 5 years ago would now be looking at an investment worth $2,331.
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