NET Should I Buy
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Cloudflare Inc (NET) is a good buy for a beginner investor with a long-term focus and $50,000-$100,000 available for investment. The company's strong growth potential in AI adoption, robust revenue growth, and positive analyst sentiment outweigh the minor financial setbacks. The pre-market price of $205.5 is reasonable given the company's growth trajectory and market positioning.
The MACD is positive and expanding, indicating bullish momentum. RSI is neutral at 57.1, suggesting no overbought or oversold conditions. The stock is trading near its R1 resistance level of 208.404, with strong support at 190.107. Converging moving averages indicate a potential trend continuation.
Recent partnerships and product launches during 'Agents Week,' including integration with OpenAI's models, driving a 6.9% stock increase.
Strong analyst upgrades and positive sentiment, with Piper Sandler upgrading to Overweight and Mizuho maintaining an Outperform rating.
Robust Q4 revenue growth of 33.60% YoY and strong positioning in AI-related infrastructure.
Decline in net income (-6.00% YoY) and EPS (-25.00% YoY) in Q4
Mixed cybersecurity demand as noted by Mizuho.
Gross margin dropped to 73.64%, down 3.57% YoY.
In Q4 2025, Cloudflare reported revenue growth of 33.60% YoY, reaching $614.5 million. However, net income dropped to -$12.08 million (-6.00% YoY), and EPS fell to -$0.03 (-25.00% YoY). Gross margin also declined to 73.64%, down 3.57% YoY. Despite these setbacks, the company demonstrated strong top-line growth and highlighted its largest annual contract deal ever.
Analyst sentiment is predominantly positive, with multiple upgrades and high price targets. Piper Sandler upgraded to Overweight with a $222 target, citing strong AI adoption and infrastructure positioning. Mizuho maintained an Outperform rating with a $235 target, emphasizing solid channel checks and AI-driven growth. Other firms like BTIG, Citi, and Morgan Stanley also provided high targets, reflecting confidence in the company's growth potential.
