Cloudflare (NET) is at the center of a surge in artificial intelligence (AI) workloads, providing the foundational infrastructure for AI agents, edge inference, and machine-driven internet traffic. In my view, the company is moving beyond its traditional cybersecurity and content-delivery roots. Even after a near-70% gain over the past 12 months, far ahead of the S&P 500’s (SPX) roughly 15% gain, I remain bullish. With automated workloads and machine-to-machine interactions continuing to scale, the company’s expansive global network is well-positioned to capture the resulting long-term upside.
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Cloudflare’s AI Opportunity Is Bigger than a Single Product Cycle
Many software companies are still trying to determine whether AI helps them, hurts them, or simply changes how customers buy software. Cloudflare looks different. It is already positioned in the flow of internet activity, and AI appears to be increasing the value of that position.
The company is benefiting from AI in several ways at once. Developers are increasingly using Workers to build and deploy AI-native applications. More AI agents mean more internet traffic, which benefits Cloudflare’s network layer. As machine-driven activity increases, so does the need for security, access controls, and Zero Trust tools. That combination matters because Cloudflare does not need a complete business model reinvention to participate in AI. Its current platform already sits close to the demand.
That is why I think the market may still be too focused on Cloudflare as a premium software stock and not focused enough on its role as AI infrastructure at the internet layer. Semiconductors may get the attention, but software still needs to be delivered, secured, and scaled. Cloudflare is increasingly placed at that intersection.
The Numbers Show that Momentum Is Real
The bullish case would be weaker if the AI story were still mostly conceptual. Instead, the operating data suggest that the company’s relevance is translating into stronger business momentum. In Q4, Cloudflare generated $614.5 million of revenue, up about 34% year-over-year, marking its third straight quarter of accelerating growth. Management guided to $2.79 billion of revenue for 2026 at the midpoint, implying about 28.7% growth. That is strong in its own right, but the quality of the supporting metrics is even more important.
Net new annual contract value rose nearly 50% year-over-year, the fastest growth since 2021. Remaining performance obligations increased 48%, and dollar-based net retention improved to 120%, up from 111% a year earlier. Cloudflare also ended the year with 269 customers spending more than $1 million annually, up 55% year over year. Those numbers point to stronger enterprise penetration, larger deal sizes, and broader product adoption across bigger accounts.
Workers and the Edge May Be the Real Long-Term Engines
If there is one area that could define Cloudflare’s next chapter, I think it is Workers. AI changes where applications are built and where compute is needed. Not every workload belongs in a centralized hyperscale environment, and not every developer wants to manage infrastructure complexity just to ship software globally.
That is where Cloudflare has an edge. The Workers platform gives developers a way to run code close to users across Cloudflare’s global network, offering low latency and tight integration into the company’s broader platform. Management has been clear that AI-native builders are increasingly drawn to it. This is a meaningful signal, as developer preference often becomes a durable platform advantage over time.
Cloudflare’s architecture also gives it flexibility that many competitors do not have. Every server runs the full Cloudflare code stack, which helps the company roll out new functionality globally without building fragmented infrastructure. Management has argued that this design allows Cloudflare to run AI workloads more efficiently than hyperscalers, whose incentive is to rent more compute.
The Rise of AI Agents Could Create a Platform Flywheel
The most interesting part of the thesis, in my view, is what would happen if the internet became increasingly agentic. If AI agents begin to generate far more requests, execute actions across the web, and interact with services autonomously, Cloudflare could benefit at multiple layers.
Management recently said weekly AI-agent requests across its network more than doubled in January 2026. If that trend continues, the company benefits when agents are built on Workers, when their activity flows through Cloudflare’s network, and when customers need more security to manage those interactions safely. In other words, agent growth could drive more platform usage, more traffic, and more demand for higher-value security products.
There is also optionality in newer initiatives, such as Act 4, Cloudflare’s effort to build a pay-per-crawl model for the AI era. That opportunity is still early, and I would not base the thesis on it today. However, strategically, it makes sense. If model providers need access to internet content and publishers want compensation for that access, Cloudflare could end up acting as a toll collector and infrastructure layer between the two sides. That would be a meaningful long-term opportunity, especially if it develops with above-average margins.
Wall Street’s View
According to TipRanks, Cloudflare has a Moderate Buy consensus rating, with 17 Buy ratings, nine Holds, and one Sell. Based on 27 Wall Street analysts, the average 12-month price target is $232, implying about 19.2% upside from the recent price of $194.63.
Conclusion
I am bullish on Cloudflare because I believe AI is enhancing, not disrupting, its core strengths. The more developers build AI agents, the more internet traffic those agents generate, and the more businesses need secure, low-latency infrastructure, the more relevant Cloudflare becomes.
The stock has already outperformed, but I do not think the market has fully priced in what Cloudflare could become if it continues evolving into a core layer of the agentic internet. With accelerating growth, stronger enterprise traction, and real AI-driven demand already showing up in the numbers, I believe the stock still has room to move higher.