From Nasdaq: 2025-05-27 08:56:00

Cloudflare, Inc. NET stock has outperformed the Internet – Software industry, gaining 8.8% in the past three months. Strong fundamentals, expanding enterprise adoption, and AI-driven growth initiatives have boosted investor confidence. First-quarter results show a 27% revenue increase, with 3,527 customers paying over $100,000 annually.

Cloudflare’s focus on AI and Zero Trust security offerings is driving long-term growth. Recent wins include a $6.4 million contract with a Global 2000 company and a $6.2 million contract with a U.S. government entity. AI-related requests have surged, attracting leading companies to build AI interfaces on Cloudflare Workers.

For Q2 2025, Cloudflare projects revenues between $500 million and $501 million. Full-year 2025 revenue estimates range from $2.09 billion to $2.094 billion. While the outlook is positive, concerns arise from a decelerating revenue growth trend and fierce competition in the web infrastructure and security services market.

Zacks names Cloudflare as a hold due to its growth potential, contract wins, and improved guidance. However, the decelerating revenue growth and competitive landscape pose risks. The company’s Zacks Rank #3 reflects a cautious stance on NET stock for now. Cloudflare’s growth prospects are promising, but challenges loom ahead in a competitive market.



Read more at Nasdaq: Cloudflare Rises 9% in 3 Months: Should You Hold or Fold NET Stock?