Cloudflare, Inc. (NET) - Stock Analysis
Last updated: Jan 14, 2026
Research Idea
Research content for general circulation. Not individualized advice. Methodology & Disclosures
Cloudflare (NET) is positioned for short-term growth given 31% Q3 revenue growth fueled by AI and cloud partnerships, expanding enterprise pipeline, positive analyst upgrades, and moderate technical recovery with ~10% gain in recent weeks, despite operational headwinds, making it a compelling near-term AI infrastructure growth idea.
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AI Analyst Overview
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Valuation Metrics
Fundamental Analysis
Key Financial Insights: ⢠High gross margins ⢠Rising leverage ⢠Positive FCF NET displays strong operating performanceâvery high gross margins, improving EBITDA and positive free cash flowâyet faces rising leverage, continued net losses and extremely rich market multiples that heighten valuation risk.
Price Behavior
Key Price Behavior Insights: ⢠Downward trend ⢠Support tested ⢠Resistance firm Support Level: $186 Resistance Level: $200 Over the last month NET has slipped from highs above $200 to the mid-$180s, repeatedly testing support near $186 and failing to reclaim $200, signaling continued selling pressure unless $186 holds or $200 is regained.
Sentiment & News
Key News Insights: ⢠AI inference pivot ⢠Edge global presence ⢠Institutional inflows Cloudflare is gaining institutional backing and analyst upgrades as it pivots from CDN to an AI-driven, edge-focused security and inference platform, landing multimillion-dollar contracts and positioning for strong growth into 2026.
AI Summary
Cloudflare's shift from a volume-driven CDN/security vendor to an AI-inference and developer platform materially reframes the investment caseâupside hinges on proving GPU/inference economics (higher utilization and pricing) and converting strong billings/RPO into durable revenue and FCF to service elevated debt. Monitor GPU utilization trends, grossâmargin stabilization, and billingsârevenue conversion as the specific, actionable signals that will validate the higherâARPU thesis or trigger downside from margin compression and refinancing risk.
Description
CloudFlare, Inc. is a San Franciscoâbased cloud services company that provides security, performance and reliability capabilities to businesses globally. Its offerings protect and accelerate traffic across public and private clouds, on-premises environments, SaaS and edge devices, while also supplying developer tools, DNS and consumer-facing services. The company serves customers across technology, healthcare, financial services, retail, non-profits and government and was incorporated in 2009.
Idea History
| Date | Close | Ticker | Company | Summary | Status | P/L |
|---|---|---|---|---|---|---|
| Dec 23 | Dec 30 | NET | Cloudflare, Inc. | Cloudflare (NET) is positioned for short-term growth given 31% Q3 revenue growth fueled by AI and cloud partnerships, expanding enterprise pipeline, positive analyst upgrades, and moderate technical recovery with ~10% gain in recent weeks, despite operational headwinds, making it a compelling near-term AI infrastructure growth idea. | Closed | -1.2% |