Is Cloudflare, Inc. (NET) A Good Stock To Buy Now?

Is NET a bully banal to buy? We came crossed a bullish thesis on Cloudflare, Inc. connected Compounding Your Wealth’s Substack by Sergey. In this article, we volition summarize the bulls’ thesis connected NET. Cloudflare, Inc.'s stock was trading astatine $209.22 arsenic of May 27^th. NET’s guardant P/E was 178.57 according to Yahoo Finance.

Photo by Caspar Camille Rubin connected Unsplash

Cloudflare is simply a planetary unreality infrastructure and cybersecurity institution positioned astatine the halfway of borderline computing, Zero Trust security, and AI-native networking. The institution continues to show beardown execution with gross maturation accelerating to 33.6% YoY, RPO up 47.9%, nett dollar retention improving to 120%, and grounds nett caller ARR maturation of 76% YoY, reflecting expanding lawsuit adoption and deeper level penetration.

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CAC payback improved to 15.3 months portion income productivity reached caller highs, indicating improving go-to-market efficiency. Demand is progressively driven by high-growth segments including Workers AI, Zero Trust, and developer level services, with AI cause postulation reportedly much than doubling, reinforcing aboriginal vulnerability to the emerging agentic web. Cloudflare’s moat is supported by planetary standard crossed 330+ cities, beardown web effects from 215B regular cyber threats blocked, and precocious switching costs from multi-product adoption crossed CDN, security, and compute.

Large lawsuit momentum remains robust with implicit 4,298 customers spending supra $100K annually and rising endeavor woody sizes. TAM enlargement to $196B and beyond supports a agelong runway. Financially, gross margins stay adjacent 75% with improving escaped currency travel margins astatine 16.2%, contempt continued dense reinvestment successful R&D and AI infrastructure.

While valuation remains elevated astatine ~26.9x EV/Sales and ~192x guardant earnings, reflecting a premium to peers, it is supported by beardown growth, improving portion economics, and class enactment successful AI-enabled infrastructure. Overall, Cloudflare presents a structurally compounding maturation communicative with durable secular tailwinds and expanding AI-driven optionality, positioning it arsenic a semipermanent victor successful next-generation net infrastructure.

Previously, we covered a bullish thesis connected Cloudflare, Inc. (NET) by Oliver | MMMT Wealth successful April 2025, which highlighted scaling web effects, profitability inflection, and enlargement crossed information and developer services. NET’s banal terms has appreciated by astir 95.88% since our coverage. Sergey shares a akin presumption but emphasizes stronger caller execution, accelerating AI-driven demand, and improving portion economics driven by RPO and NDR expansion.