Cloudflare, Inc. (NET) Reports Second-Quarter Results; Scotiabank Raises PT to $200

Cloudflare, Inc. (NYSE:NET) is included in our list of the 11 Hot Software Stocks to Buy Now.

On August 1, 2025, Scotiabank raised its price target on Cloudflare, Inc. (NYSE:NET) from $135 to $200, maintaining a ‘Sector Perform’ rating. This price revision came a day after the company reported its second-quarter results.

For Q2, Cloudflare, Inc. (NYSE:NET) reported annualized revenue of over $2 billion with 28% YoY growth. Its revenue reached $512.3 million, which exceeded expectations. Furthermore, its non-GAAP operating income reached $72.3 million, bringing the margin to 14.1%.

Cloudflare, Inc. (NYSE:NET)’s leadership cited stronger demand, larger and longer-term deals, and strategic wins in AI-driven content creator solutions. The company is well-positioned to capitalize on the emerging ‘agentic web,’ a new phase of the internet marked by autonomous, goal-driven interactions.

With gross margins of 76.3%, Cloudflare, Inc. (NYSE:NET) closed the quarter with approximately $4 billion in cash. Looking ahead, it expects FY25 revenue of $2.113-$2.116 billion and Q3 revenue of $544.5 million on the higher side.

With its vast connectivity cloud platform, Cloudflare, Inc. (NYSE:NET) delivers cloud-based networking, security, and performance solutions. It is included in our list of the hot stocks to buy.

While we acknowledge the potential of NET as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.