Cloudflare, the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Tomer Zilberman from Bank of America Securities reiterated a Buy rating on the stock and has a $255.00 price target.
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Tomer Zilberman has given his Buy rating due to a combination of factors that highlight Cloudflare’s resilience and growth potential. Despite a recent outage that posed some reputational risk, Zilberman views it as a non-structural issue with limited long-term impact. The company’s ability to quickly address and contain the outage suggests that such incidents are temporary and do not fundamentally undermine its business model.
Cloudflare’s strong market position, handling 20% of all Internet traffic and serving 35% of Fortune 100 companies, underscores its significant role in the industry. The company’s products are sticky, with high switching costs for customers, which supports continued revenue growth. Furthermore, Cloudflare’s stock has historically outperformed the broader market, even following past outages. Zilberman also notes the company’s premium valuation and strong growth trajectory, driven by demand in security and AI, as well as improving margins, which collectively justify the Buy rating.