The internet’s new favorite security guard has just scaled new heights in its stock price. Following a massive 10.2% surge on Monday, Cloudflare (NET) shares held their ground in early Tuesday trading at $183.96. This rally was fueled by investors hunting for high-quality software leaders that had become oversold during recent market volatility.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
Shaul Eyal, a 5-star analyst at TD Cowen, reiterated his “Buy” rating and a price target of $265 this morning. Even after today’s jump to roughly $184, Eyal’s forecast suggests a massive 44% upside still remains on the table for investors.
AI Agents Become the New Power Users
The primary engine behind today’s bullish outlook is the fundamental shift in how the internet works. As AI bots and agents start browsing the web more than humans, Cloudflare’s network is becoming the infrastructure they rely on.
In today’s report, Eyal noted the company’s “clockwork execution” as a key reason to stay aggressive on the stock. He highlighted that during early 2026, the number of weekly requests generated by AI agents has surged across its network. According to Eyal, “AI is becoming the biggest tailwind for Cloudflare’s network,” positioning the company as the “essential platform” that these new digital users must pass through.
Massive Deals Drive Record Revenue Growth
Beyond the AI hype, the company is proving it can win over the world’s biggest spenders. Cloudflare recently secured its largest ever annual contract value (ACV) deal, signaling a major move up-market into the Fortune 500.
Eyal’s report emphasizes that the company’s go-to-market strategy is finally paying off. TD Cowen pointed out that the company delivered 34% year-over-year revenue growth in its most recent full quarter. Rising enterprise demand suggests that Cloudflare is now on a clear path to reach $5 billion in annual recurring revenue by 2028. Eyal believes the company’s ability to bundle security and networking into one package makes it a mandatory buy for large firms.
Cloudflare Is Scaling the Workers Developer Platform
The final piece of the puzzle is the company’s developer ecosystem. Coders receive tools to build AI applications directly on the local servers of the internet. This creates a protective barrier that other cloud companies find very difficult to get past.
The company exited 2025 with more than 4.5 million active developers on its platform. Eyal wrote today that “the company highlighted strength from the Workers developer platform,” which acts as a “virtuous flywheel” for the rest of the business. As more developers build on Cloudflare, they naturally pull in more of the company’s security services. This ensures that growth remains sustainable even in a volatile market.
Is Cloudflare a Buy, Sell, or Hold?
Turning to Wall Street, Cloudflare stock carries a Moderate Buy consensus rating. Among the 27 analysts covering the stock, 17 have issued Buy recommendations, nine rate it as Hold, and one deems it a Sell. Moreover, the average 12-month NET stock price target of $232 implies a 26% upside potential from current levels.
