NET Should I Buy
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Cloudflare Inc (NET) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company's strong growth prospects in AI adoption, partnerships with OpenAI and Wiz, and positive analyst sentiment outweigh the short-term financial challenges. The stock's potential for long-term appreciation aligns well with the investor's goals.
The MACD histogram is negative (-2.776) but contracting, RSI is neutral at 52.86, and moving averages are converging, indicating no strong trend. The stock is trading near its pivot level of 195.101, with resistance at 218.434 and support at 171.768.
Partnerships with OpenAI and Wiz announced during 'Agents Week,' driving a 6.9% stock price increase.
Analysts have upgraded the stock and highlighted its strong positioning in AI and edge distribution platforms.
Revenue growth of 33.60% YoY in Q4 2025 reflects solid demand for its services.
Decline in net income (-6.00% YoY) and EPS (-25.00% YoY) in Q4
Gross margin dropped to 73.64%, down 3.57% YoY, indicating cost pressures.
In Q4 2025, revenue increased by 33.60% YoY to $614.5M, showcasing strong top-line growth. However, net income dropped by 6.00% YoY to -$12.08M, and EPS fell by 25.00% YoY to -0.03, reflecting profitability challenges. Gross margin declined to 73.64%, down 3.57% YoY.
Recent analyst ratings are positive overall. Piper Sandler upgraded the stock to Overweight with a $222 price target, citing growth opportunities in AI and edge distribution platforms. Mizuho and other firms maintain high price targets, with the lowest being $190. Analysts are optimistic about Cloudflare's AI adoption and infrastructure positioning.
