Johan Ekroth
AI Infrastructure/Space/Defense Investor, Bottleneck Research
Cloudflare is positioned to own the network layer AI agents route through if agents become their own class of traffic. It is building infrastructure specifically for agents: edge inference, tools to authenticate and control agent traffic, and access and payment layers for agent activity. x.comÂ
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.comÂ
Cloudflare has three AI-driven trends working in its favor. AI will uncover more vulnerabilities; protection against more AI bots, agents and crawlers is needed; and its developer platform, including Workers, is becoming the default for agent-related development. CrowdStrike is not a favorite. x.comÂ
Cloudflare's valuation, about 28.5x EV/ARR and 453x run-rate GAAP EBIT, leaves little room for its competitive risks. Its SASE and developer-platform businesses face Zscaler, Palo Alto and hyperscalers with far bigger budgets, and OpenAI and Anthropic may keep inference on their own backends. The bull case is crisp and arguably priced in: bot security and edge workloads matter more as agents spread, growth sped up from 27% to 34%, and weekly agent requests doubled in January. x.comÂ
Cloudflare may be one of the best picks-and-shovels winners of agentic AI, with AI bot traffic on pace to surpass human internet traffic by 2027. If agents hit thousands of sites for a single task, the companies managing that load, routing the traffic and securing the internet stack stand to capture enormous value. x.comÂ
Cloudflare may be the strongest software play on agentic AI in the public markets. x.comÂ
Cloudflare's edge is a real AI-crawl chokepoint, but the price is the problem. FedRAMP High clearance on August 10 opens federal national-security workloads, and since traffic transits its edge, pay-per-crawl and bot rules are enforced there. Q2 revenue of $696M rose 36%, confirming the thesis without changing it. At 40x EV/sales, 182x forward earnings and a -8% GAAP operating margin, a de-rating needs no bad news; adding waits for ~$268. Direct lab-publisher licensing could bypass the toll. … Show more
Cloudflare shares should keep rising as AI-agent traffic lifts demand for edge compute: Oppenheimer reports rising contract values and Workers adoption, with stronger Bot Management and API Shield attachment, and expects Q3 to beat guidance. x.comÂ
Cloudflare is an agentic AI and cybersecurity name whose weekly blue-candle signals have paid well for 24 months, and it is hugging its upper Bollinger Band again. Dario Amodei's letter may give it another boost. The key for cybersecurity companies is integrating LLMs well into their ecosystems. x.com x.comÂ
Cloudflare's business outlook looks very bullish, but the stock needs to fall back below $200 before even a small position makes sense. Cloudflare sees a need for a payment processor that can handle millions or tens of millions of transactions per second to support microtransactions on the agentic web, and its recent fireside chat was very bullish. x.com x.comÂ
The infrastructure shift for autonomous AI agents has arrived, favoring Cloudflare, Alphabet and other owners of agent orchestration, edge compute and inference cloud for a 3-5 year hold. Cloudflare's Dynamic Workers run agent code 100x faster without containers, and Google's TurboQuant cuts AI memory use 8x, slashing costs over 50%, as Anthropic's Claude now operates Macs. AI dollars flow through compute, networking, memory, power, cooling and buildout, where second-order winners live. x.com … Show more
