Venu
Position Trader, Market Leaders, Fundamental/Technical Analysis
Cloudflare is trying to make its network the control layer for more internet and AI traffic, not sell one more point product. Its CDN already sits close to users and applications on a global edge, a natural place to add security, Zero Trust, developer compute and AI controls such as Workers AI. Q1 2026 supports this: revenue up 33.5%, $2.54B of RPO and 118% net retention. The case holds if consolidation keeps showing up in adoption; the main risks are valuation and execution. x.comÂ
Cloudflare's Q2 beat-and-raise shows growth holding above 35% as it becomes an AI-era platform for networking, security, edge computing and agent infrastructure. Revenue rose 36% to $696M versus $666M expected, current RPO grew 35%, and full-year revenue guidance rose again to $2.86-2.87B. Its CEO says traffic is shifting toward AI-to-AI and agent-to-agent interaction. Non-GAAP gross margin fell 320 bps to 73.1% and layoff charges drove a GAAP loss, but neither affects cash flow or guidance. … Show more
Cloudflare cannot justify a bullish view at a 10000x revenue valuation. x.comÂ
Cloudflare is a key enabler of agentic AI and has been overly punished in the software selloff, setting up a 2026 re-rating. It supports OpenClaw, the self-hosted autonomous agent popular since February, as it shifts toward autonomous AI workflows. Paying customers rose 40%, yet only about 1% of 25 million websites pay, and it signed a landmark $130 million contract. Relative strength versus the software ETF and a 30%+ rally after washouts below the 200-day average point the same way. x.comÂ
Cloudflare's 20% workforce cut reflects AI doing the work of 1,100 employees, not a failing business, so margins are about to explode. It beat on EPS and revenue and raised full-year guidance, with revenue up 34% and billings up 37.8%, and holds $4.16 billion of cash. The 18% post-earnings drop misses that it is building the infrastructure every AI agent on the planet will run through. x.comÂ
Cloudflare's stock price is far beyond what the company can ever pay back to shareholders. Even if free cash flow quadrupled next year to $250 million, or reached $1 billion annually, investors would only earn back their investment around 2106. SpaceX conceivably offers more optionality through Starlink. x.comÂ
Cloudflare is one of the names leading this market and likely to lead the next leg higher, as an emerging leader in data inference and a core piece of internet DNS infrastructure. That positioning helped it avoid sustained weakness like its 81% drawdown in 2022 and 50% pullback in April 2025. With the market within 3% of all-time highs, there is little reason to bottom fish in names still down 50%+, though Cloudflare remains very expensive. x.com x.comÂ
Zeta Global is the better buy than Cloudflare because it has the same growth at a fraction of the price. Zeta trades near 5x sales and 29x forward earnings with about 39% revenue growth, while Cloudflare trades near 40x sales and 167x forward earnings on about 34% growth. x.comÂ
Cloudflare at 38x NTM revenue and 150x NTM EBITDA is insane, so a decent return from here is unlikely even though it is the leader. That has never happened before without massive acceleration in growth rates and margin expansion. x.comÂ
Cloudflare deserves its premium multiple far more than CrowdStrike does. Cloudflare is growing about 40% against CrowdStrike's mid-20s, and it adds a call option on agentic expansion. Both trade at nosebleed valuations. x.comÂ