Cybersecurity Shares Decline on Friday After News of Anthropic AI Model "Claude Mythos" Leak
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 27 2026
0mins
Source: moomoo
Stock Market Decline: Cybersecurity stocks, including Palo Alto Networks and CrowdStrike, fell by 6%, while Zscaler and Okta dropped by 5%.
Cause of Decline: The declines are likely linked to reports of a leak regarding Anthropic's latest AI model, "Claude Mythos," before its official launch.
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Analyst Views on NET
Wall Street analysts forecast NET stock price to rise
25 Analyst Rating
15 Buy
10 Hold
0 Sell
Moderate Buy
Current: 226.650
Low
131.00
Averages
253.24
High
318.00
Current: 226.650
Low
131.00
Averages
253.24
High
318.00
About NET
Cloudflare, Inc. is a connectivity cloud company. The Company delivers a range of services to businesses of all sizes and in all geographies, enhancing the performance of business-critical applications. Its full suite of products consists of application services that help deliver security, performance, and reliability for any organization's applications connected to the Internet, including Websites and application programming interfaces (APIs) and its secure access service edge (SASE) platform, which contains its suite of and workplace security services and network services solutions to help ensure traffic in and out of an organization’s network and devices is verified and authorized and data is protected and secured, as well as to securely connect data centers, cloud services, and branch offices to an organization with its connectivity cloud. The Company also offers developer-based solutions which build and deploys serverless and artificial intelligence applications.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Stock Performance: Cloudflare (NET) closed at $226.65, up 1.42% from the previous trading session, outperforming the S&P 500's slight decline, indicating its relative strength in the market.
- Earnings Outlook: The upcoming EPS is projected at $0.27, reflecting a 28.57% increase year-over-year, while revenue is expected to reach $665.42 million, marking a 29.88% rise compared to the same quarter last year, showcasing robust momentum in profitability and revenue growth.
- Analyst Optimism: The Zacks consensus EPS estimate has surged by 400% over the past month, with Cloudflare currently holding a Zacks Rank of #2 (Buy), indicating analysts' optimistic outlook on the company's future profitability, which could drive stock price increases.
- Valuation Metrics: Cloudflare's forward P/E ratio stands at 185.62, significantly above the industry average of 18.07; however, its PEG ratio of 4.3 suggests that the market still holds high expectations for its future growth, reflecting investor confidence in its long-term potential.
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- Market Decline: The S&P 500 and Nasdaq 100 fell by 0.05% and 1.09% respectively on Friday, reaching two-week lows, indicating market sensitivity to the weak performance of chipmakers, which could undermine investor confidence.
- Chipmaker Sell-off: The significant drop in Samsung Electronics and SK Hynix shares led to a more than 5% decline in South Korea's Kospi Index, triggering a global downturn in semiconductor stocks and exacerbating market uncertainty.
- Oil Price Impact: WTI crude oil prices fell over 3% to a four-month low on Friday, which helps lower inflation expectations and supports the stock market, but also reflects potential slowdowns in global economic growth.
- Consumer Sentiment Revision: The University of Michigan's consumer sentiment index was revised upward by 0.6 to 49.5, although still below the expected 50.0, indicating a cautious consumer outlook that may affect future spending.
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- Layoff Scale: Cloudflare announced a 20% workforce reduction, eliminating over 1,100 positions, marking the largest layoff in the company's history, aimed at adapting to the structural shifts of the AI era, reflecting its ability to navigate future market challenges.
- Surge in AI Tool Usage: The company reported a 600% increase in internal AI tool usage, indicating the potential of AI in enhancing productivity, prompting Cloudflare to take decisive actions to optimize its workforce allocation and maintain a competitive edge.
- Strong Financial Performance: Despite the significant layoffs, Cloudflare's recent quarterly results revealed a 34% year-over-year revenue increase to $639.8 million, demonstrating robust market demand for security infrastructure investments in the AI era.
- Significant Customer Growth: The company also saw notable growth in large enterprise customers, with a 25% increase in those paying over $100,000 annually, alongside a 73% jump in deals worth over $1 million, laying a solid foundation for future business expansion.
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- AI-First Strategy: Cloudflare (NET) recently unveiled an AI-first operating model aimed at supporting growth while maintaining capital discipline, reflecting a strategic shift in the AI infrastructure sector.
- Market Competition Dynamics: As AI workloads grow more complex, Cloudflare faces competitive pressure from large cloud providers that spend tens of billions annually on AI investments, while seeking to capture market demand through operational efficiency and software-driven approaches.
- Workforce Adjustment: Cloudflare announced workforce reductions, with management stating that this is not merely a cost-cutting measure but a transformation of the operating model, aimed at enhancing overall efficiency and responsiveness.
- Industry Trend Reflection: Cloudflare's AI-first strategy aligns with broader industry trends, emphasizing automation and network efficiency to seize AI-related market opportunities without undertaking large-scale capital expenditures.
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- Price Range Analysis: CIBR ETF's 52-week low is $60.07 per share and high is $94.395, with the last trade at $83.86, indicating relative stability and investor confidence in the current market.
- Technical Analysis Tool: Comparing the current share price to the 200-day moving average provides valuable insights for investors, helping to assess market trends and potential buying opportunities.
- ETF Unit Trading Mechanism: ETFs trade like stocks, where investors buy and sell 'units' that can be created or destroyed based on demand, impacting liquidity and market performance.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding helps identify ETFs experiencing significant inflows or outflows, allowing investors to stay informed about market dynamics and investment opportunities.
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- Profitability Issues: Cloudflare reported a net operating loss of $62 million in Q1, with revenue growth of 34% year-over-year, but the loss represented 9.7% of revenue, indicating that profitability remains a significant barrier to stock price appreciation.
- Poor Market Performance: Year-to-date, Cloudflare's stock has only risen 13.8%, significantly lagging behind competitors CrowdStrike and Fortinet, which have increased by 49% and 87%, respectively, reflecting market concerns over its high valuation.
- Valuation Risks: With a price-to-sales ratio exceeding 33 times, Cloudflare's valuation is comparable to CrowdStrike but more than double that of Fortinet, and without profitability, investors may seek more attractive alternatives.
- Strong Customer Base: Despite profitability challenges, Cloudflare boasts over 4,400 large customers, including more than 40% of Fortune 500 companies, demonstrating the appeal of its services and customer retention capabilities, but ongoing profitability issues may hinder future growth potential.
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