From Nasdaq: 2025-04-29 11:10:00

Cloudflare Inc. (NET) has outperformed the Internet – Software industry with a 7.3% gain in the past month. With a focus on AI and security, Cloudflare is positioned for long-term growth. Strong financials, notable customer wins, and AI-driven platforms contribute to its success. However, competition is intensifying, and Cloudflare is currently overvalued.

Cloudflare’s profitability metrics remain strong, with an operating income of $67.2 million in Q4 2024. The company forecasts non-GAAP earnings per share between 79-80 cents for 2025, indicating a 5.33% year-over-year growth. While Cloudflare’s growth prospects are promising, its current overvaluation raises concerns for investors.

Cloudflare faces tough competition from established players like Akamai Technologies, Fastly, and Amazon Web Services. These companies offer a wide range of infrastructure and security services, adding to the competitive pressure on Cloudflare. The market for web infrastructure and security services is highly competitive and constantly evolving.

For patient investors, holding Cloudflare stock is recommended despite its current overvaluation. The company’s expanding enterprise client base, strong financial performance, and AI-driven innovation position it for sustained growth. Cloudflare’s success in the rapidly growing AI and security markets make it a key player in the industry.



Read more at Nasdaq: Cloudflare Rises 7% in a Month: Should You Hold or Fold the Stock?