Anthropic partnership puts Cloudflare’s AI infrastructure in focus

Cloudflare (NET) is back in the spotlight after announcing a collaboration with Anthropic to launch Cloudflare Environments for Claude Managed Agents, a platform designed to run AI agent tasks securely and at scale.

The Anthropic collaboration lands at a time when momentum in Cloudflare’s stock is already strong, with a 90 day share price return of 31.96% and a 3 year total shareholder return of 253.57%. This indicates sustained investor interest rather than a short lived spike.

If this AI partnership has you thinking about where else automation could reshape infrastructure, it might be a good moment to scan the market for 46 AI infrastructure stocks

With Cloudflare shares up 31.96% over 90 days and trading close to the average analyst price target of US$234.18, the key question is whether this AI momentum leaves upside on the table or means potential future growth is already reflected in the price.

Most Popular Narrative: 7% Undervalued

Cloudflare's most followed narrative puts fair value at about $231.85, above the last close of $216.17. This frames the current price as slightly behind that view.

The accelerating adoption of AI, explosion in global web traffic, and proliferation of IoT devices are driving increased demand for fast, secure, and resilient cloud-native infrastructure, Cloudflare's core strength, evidenced by record-breaking DDoS mitigation and expanding partnerships with major AI companies, positioning the company for sustained top-line revenue growth and strengthening customer retention.

Want to see what kind of revenue ramp, margin shift, and earnings path are baked into that fair value, and how steep the implied future multiple really is?

Result: Fair Value of $231.85 (UNDERVALUED)

However, this narrative could shift quickly if customer concentration bites through a major contract loss or if tighter global data rules raise Cloudflare’s operating costs.

Another View: Rich Sales Multiple Raises the Bar

The SWS DCF model is one lens, but the current P/S ratio of 32.8x tells a different story. It sits far above the US IT industry at 2.2x, peers around 10.9x, and an estimated fair ratio of 14.2x, which points to meaningful valuation risk if sentiment cools.

For a closer look at what this gap might mean if the market gravitates toward that fair ratio, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With all this in mind, do these mixed signals leave you excited or cautious about Cloudflare, and how quickly do you want to test that view against the full breakdown of 1 key reward and 1 important warning sign?

Looking for more investment ideas?

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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.