Cloudflare, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Shrenik Kothari from Robert W. Baird upgraded the rating on the stock to a Buy and gave it a $260.00 price target.
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Shrenik Kothari has given his Buy rating due to a combination of factors that point to a powerful, multi‑engine growth story at Cloudflare. He emphasizes that the latest quarter showed the clearest evidence yet that the company’s multi‑year go‑to‑market overhaul is now delivering, with record annual contract value growth, stronger remaining performance obligations, and robust net revenue retention, all while guidance for fiscal 2026 still appears conservative relative to underlying demand.
He also highlights structural tailwinds from agentic AI, which is driving a sharp rise in traffic and monetization per workload, alongside growing developer adoption and faster‑growing developer‑led recurring revenue. In addition, he points to emerging large‑scale infrastructure wins versus hyperscalers and early but strong “pool‑of‑funds” commitments that should convert into higher consumption, concluding that sentiment has cooled while fundamentals are accelerating, creating an attractive risk‑reward profile for the stock.
Shrenik Kothari’s rating is based on Cloudflare’s increasingly diversified growth drivers and improving execution. He notes that record quarterly contract signings, faster RPO growth, and solid net revenue retention confirm that multiple growth vectors—enterprise expansion, developer monetization, and AI‑driven workloads—are compounding at the same time, yet management’s revenue outlook for 2026 still builds in caution, leaving room for positive surprises.
He further underscores that AI agents are generating much higher network activity and naturally pulling through security, performance, and developer products, while the company is beginning to win full‑stack infrastructure mandates away from major cloud providers on the strength of neutrality and cost efficiency. Combined with strong customer commitments under pool‑of‑funds models that precede full usage, he views this setup as one where fundamentals are strengthening faster than expectations, justifying his Buy recommendation.
Kothari covers the Technology sector, focusing on stocks such as CommVault Systems, Varonis Systems, and Zscaler. According to TipRanks, Kothari has an average return of 17.7% and a 62.37% success rate on recommended stocks.
In another report released today, TD Cowen also reiterated a Buy rating on the stock with a $265.00 price target.