Dr J Rould
Full-Time Tech Investor, Quantum/Cybersecurity, Philosophy Background
Cloudflare's valuation looks extreme at about 42 times sales, making it a candidate for taking profits even though the business keeps delivering. The cybersecurity landscape now looks questionable on valuation, as with CrowdStrike. The fundamentals have performed as well as could be expected, and Cloudflare could still join a future megacap group with a market cap near $1T in the 2030s. x.com x.com
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.com
Fastly's overall offering falls far short of Cloudflare's, and the market has already rewarded the strongest cybersecurity players. Fastly is a more modern CDN than Akamai and has some cybersecurity exposure. Buying is off the table for now, though if forced to buy one stock, Fastly would probably be the pick. x.com
Cloudflare cannot justify a bullish view at a 10000x revenue valuation. x.com
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.com
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.com
Cloudflare's 44x revenue valuation still does not make sense, despite its benefit from a network control point. Matthew Sigel reports that nearly every shopping site he tries blocks Instinct and Muse. x.com
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 may be the strongest software play on agentic AI in the public markets. x.com
Cloudflare has one of the most ludicrous valuations relative to its actual performance. @ecommerceshares notes it has run since 2009 yet still has a -10% operating margin, surviving because fund managers keep buying the new stock it issues every quarter, equal to 18% of revenue, so breakeven is never required. x.com
Cloudflare looks attractive as more AI agents bring more traffic for it to route, secure and bill. Its recent dips have reversed, while the agent-driven traffic opportunity is the business case. x.com