NET Surges 85% in a Year: Should You Buy, Sell or Hold the Stock?

Cloudflare Inc. NET shares have gained 85.1% in the past year, outperforming the Zacks Internet – Software industry’s growth of 4.5%. This upward swing in the past year has raised questions for investors: Should they buy, sell or hold Cloudflare stock right now? Let’s dive into the fundamentals to further assess it!

NET One-Year Performance Chart

NET Gains From Its Rising Role in AI and Security Space

Cloudflare’s deployment of edge network and security at scale has enabled it to provide a low-latency network at an affordable cost, giving it a competitive advantage among AI companies that now deploy AI agents across Cloudflare’s globally distributed edge network. In this pursuit, Cloudflare now serves roughly 80% of leading AI companies globally.

This has further led to enterprise adoption of NET’s offerings, leading to long-term commitments. Cloudflare now commands more than 55 revenue-generating products, enabling frictionless adoption and consumption of its products, adding to NET’s annual contract value and net retention rate.

NET’s security offerings have strengthened its position in the content delivery network space. Cloudflare’s Magic Transit, Zero Trust, and modern SASE solutions are experiencing increased traction. The rise of AI scraping and bot activity is also helping NET monetize its products like AI Crawl Control, Bot Management, and future Pay-Per-Crawl models.

Together, these tailwinds in AI, security, multi-cloud networking, developer platforms, and enterprise scale create a multi-layered growth engine for Cloudflare, providing it a moat that is hard to penetrate, giving NET long-term growth potential. The Zacks Consensus Estimate for its 2025 revenues projects year-over-year growth of 28%. NET’s earnings have been revised upward by a penny in the past seven days.

Cloudflare Gains From Its Strong Partner Base

Cloudflare has partnered or deepened its collaboration with leading companies like Oracle ORCL, Alphabet GOOGL, Coinbase COIN, Visa, Mastercard and American Express for cryptography, agent-to-agent payments and in-app extensions.

Oracle and Cloudflare have partnered for deep native integration for hybrid and multi-cloud workloads through Oracle OCI. Alphabet has been NET’s long-term partner, and now they have collaborated on post-quantum cryptography standards and browser support. Now Alphabet’s Google and NET are working together to roll out real-world tests to prove the feasibility and cost-effectiveness of their product.

On the payments front, NET collaborated with Coinbase to leverage Coinbase X402 for agent-to-agent payment protocols. With these partnerships and strengths in place, NET is likely to position itself as one of the most pivotal companies shaping the next era of the Internet and AI.

NET’s 200-Day SMA Suggest Bullish Trend

NET’s shares are trading above the 200-day moving average, indicating a bullish trend.

Conclusion: Buy NET Now

Cloudflare’s surging AI role, strengthened security stack, expanding enterprise adoption, and strong partnerships collectively reinforce its long-term growth outlook. Considering these factors, we suggest that investors should buy NET stock now.

NET carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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