Here's What Provides Growth Catalyst for Cloudflare (NET)

Carillon Tower Advisers, an investment management company, released its “Carillon Eagle Mid Cap Growth Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Mid-cap stocks rebounded in the second quarter, delivering a strong recovery. The Russell Midcap Growth Index (up 18.20%) outperformed the Russell Midcap® Value Index (up 5.34%) in the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Carillon Eagle Mid Cap Growth Fund highlighted stocks such as Cloudflare, Inc. (NYSE:NET). Cloudflare, Inc. (NYSE:NET) is a cloud services provider that delivers a range of services to businesses worldwide. The one-month return of Cloudflare, Inc. (NYSE:NET) was -3.47%, and its shares gained 166.63% of their value over the last 52 weeks. On September 02, 2025, Cloudflare, Inc. (NYSE:NET) stock closed at $208.05 per share, with a market capitalization of $72.502 billion.

Carillon Eagle Mid Cap Growth Fund stated the following regarding Cloudflare, Inc. (NYSE:NET) in its second quarter 2025 investor letter:

"Cloudflare, Inc. (NYSE:NET) provides software and services to keep internet traffic safe and secure. Investors have responded positively to the company’s continued business growth, driven by the adoption of newer, software-based tools that help enterprises secure their networks more effectively than outdated legacy hardware solutions. In addition, we believe Cloudflare’s emerging AI capabilities show strong potential and could serve as a meaningful growth catalyst heading into 2026."

Cloudflare, Inc. (NYSE:NET) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Cloudflare, Inc. (NYSE:NET) at the end of the second quarter, which was 65 in the previous quarter. Cloudflare, Inc.’s (NYSE:NET) revenue for the second quarter increased 28% year-over-year to $512.3 million. While we acknowledge the potential of Cloudflare, Inc. (NYSE: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.

In another article, we covered Cloudflare, Inc. (NYSE:NET) and shared the list of best software stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.