Why Cloudflare’s latest AI moves matter for NET stock watchers

Cloudflare (NET) has been busy, rolling out Cloudflare Mesh and Agent Cloud upgrades for AI agents, while adding new security partnerships with Wiz, Virtru, and GoDaddy that focus on AI governance and data protection.

These AI focused launches and partnerships have arrived alongside a 9.22% 7 day share price return and a 13.28% 90 day share price return. The 1 year total shareholder return of 96.84% and 3 year total shareholder return of about 3.2x indicate notable recent performance in the broader Cloudflare story.

If these AI moves have your attention, you may wish to widen your watchlist with other AI focused names by checking out 38 AI infrastructure stocks

With Cloudflare trading at about US$201 and a published analyst target near US$232, the market already assigns a premium to its AI story. Readers may ask whether there is still an opportunity here or if expected growth is already priced in.

Most Popular Narrative: 13.5% Undervalued

Cloudflare’s most followed narrative pegs fair value near $232, above the recent $200.99 close, which points to a gap between that storyline and today’s pricing.

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 strategic partnerships with major AI companies and record-breaking DDoS mitigation, positioning the company for sustained top-line revenue growth and strengthening customer retention.

Want to see what kind of revenue path and margin lift would justify that valuation gap? The narrative focuses on fast scaling, rising profitability, and a future earnings multiple that stands out even within high growth software. Curious how those pieces fit together into a single fair value number?

Result: Fair Value of $232 (UNDERVALUED)

However, this hinges on Cloudflare turning current losses into profits while managing customer concentration and intense competition from larger cloud and security providers.

Another Way To Look At NET’s Price Tag

The fair value from the most popular narrative points to Cloudflare being 13.5% undervalued, yet the SWS DCF model paints a very different picture. On that view, NET at $200.99 trades well above an estimated future cash flow value of $99.01, which frames the stock as expensive rather than cheap. Which story do you think fits your own expectations for Cloudflare’s cash generation?

Next Steps

The mixed messages on value and growth potential can feel like a lot to weigh. Act promptly, review the data firsthand, and see the 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.