JPMorgan Just Upgraded Cloudflare Stock. Here's Why.

JPMorgan analyst Samik Chatterjee says the recent selloff in Cloudflare (NET) stock has created a buying opportunity for long-term investors. Chatterjee upgraded NET stock on Tuesday to “Overweight” and raised his price target for the company to $350, indicating potential upside of nearly 30% from current levels. 

His bullish call arrives at a time when Cloudflare shares have fallen out of favor with investors, currently down about 23% versus their year-to-date high. 

Why JPMorgan Upgraded Cloudflare Stock

As of this writing, NET stock is trading at roughly 46x sales, a valuation multiple that “while still high, offers an attractive entry” into the cybersecurity and cloud networking company, Chatterjee noted.

Simply put, his upgrade doesn’t reflect a change in the company’s earnings framework but rather a view that recent weakness has created a more favorable risk-reward profile. 

Even from a technical perspective, Cloudflare looks poised for at least some recovery in 2027. Heading into Tuesday, the company’s relative strength index (RSI) was hovering in the early 30s, indicating the stock is approaching oversold levels that often trigger a near-term rally.

What Else Could Drive NET Shares Higher?

JPM recommends owning Cloudflare stock also because the company remains “well-positioned to benefit from the scaling of Act I and Act II with existing customers.”

Meanwhile, it continues to gain traction with Workers, its developer-focused platform, as well. 

Chatterjee expects those efforts to help NET capture a much larger share of enterprise spending as organizations increasingly deploy artificial intelligence applications, security services, and cloud-native workloads closer to end users.

Ultimately, the NYSE-listed firm has the potential to accelerate its sales growth rate to more than 35%, he concluded. 

What’s the Consensus Rating on Cloudflare?

Importantly, other Wall Street analysts are just as bullish on what the future holds for NET shares. 

According to Barchart, the consensus rating on Cloudflare sits at “Moderate Buy” currently, with the mean price target of about $352 indicating the company could continue to extend gains heading into 2027. 

On the date of publication, Wajeeh Khan did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.