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Cloudflare (NET), What Is Drawing Fresh Attention Now?

Simply Wall St · 2d ago

Quantum security push and new data platform catch investor attention

Cloudflare (NET) has drawn fresh interest after announcing plans to become a public Certificate Authority with post quantum ready encryption, launching the Basin data platform, and expanding its European reach through Deutsche Telekom.

Recent moves in Cloudflare’s share price suggest momentum is building, with a 30-day share price return of 27.28% and an 81.11% year-to-date gain. The 3-year total shareholder return of roughly 4.4x points to a strong longer run for investors, despite near term volatility and a small 1-day pullback of 1.25%.

Surf 92 AI infrastructure stocks that, like Cloudflare, are building the security and data rails for AI workloads and attracting strong momentum from investors tracking this theme.

Bulls see Cloudflare’s quantum push and data platform as the start of a new phase. Bears point to losses and a rich setup after a sharp run. Which case does the current valuation math lean toward next?

Most Popular Narrative: 112% Overvalued

Cloudflare last closed at $355.01 while the leading narrative on the stock pegs fair value near $167.45, so the gap between story and price is wide and hard to ignore.

My fair value estimate for Cloudflare is about $200/share.

I use roughly $2.81B in 2026 revenue, about 30% annual revenue growth over the next five years, a 25% future net margin, a 45x future earnings multiple, a 10% required return, and roughly 375M diluted shares.

See why 23 investors see Cloudflare as 112% overvalued.

According to DaneDruss, the narrative leans on Cloudflare sustaining rapid revenue expansion, lifting profitability to a 25% margin, and eventually trading on a rich 45x earnings multiple, all discounted back at 8.89%.

The same narrative also questions how much incremental cash Cloudflare can actually earn from post quantum security itself, since management has framed many of these protections as default features rather than premium add ons, which caps the upside in that specific line of the story.

Result: Fair Value of $167.45 (OVERVALUED)

Still, Cloudflare’s annual revenue of US$2.51b and ongoing net losses mean that any slowdown in growth or margin progress could challenge the current premium story.

Find out about the key risks to this Cloudflare narrative.

Next Steps

Mixed signals on Cloudflare’s story so far. If you want to move fast and make up your own mind, start by weighing its 1 key reward and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.