HB Wealth Management LLC increased its stake in shares of Cloudflare, Inc. (NYSE:NET – Free Report) by 40.4% in the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor owned 9,240 shares of the company’s stock after buying an additional 2,657 shares during the quarter. HB Wealth Management LLC’s holdings in Cloudflare were worth $2,266,000 at the end of the most recent quarter.
A number of other institutional investors and hedge funds have also bought and sold shares of the stock. Geode Capital Management LLC boosted its holdings in Cloudflare by 4.2% during the 4th quarter. Geode Capital Management LLC now owns 6,018,175 shares of the company’s stock worth $1,184,044,000 after acquiring an additional 241,981 shares during the last quarter. Jennison Associates LLC raised its holdings in shares of Cloudflare by 135.8% in the first quarter. Jennison Associates LLC now owns 4,394,484 shares of the company’s stock valued at $906,758,000 after purchasing an additional 2,530,872 shares during the last quarter. First Trust Advisors LP raised its holdings in shares of Cloudflare by 1.6% in the fourth quarter. First Trust Advisors LP now owns 4,019,157 shares of the company’s stock valued at $792,377,000 after purchasing an additional 63,198 shares during the last quarter. Invesco Ltd. lifted its position in shares of Cloudflare by 1.3% during the third quarter. Invesco Ltd. now owns 3,964,733 shares of the company’s stock valued at $850,792,000 after purchasing an additional 49,485 shares in the last quarter. Finally, Norges Bank bought a new position in shares of Cloudflare during the fourth quarter valued at about $718,316,000. 82.68% of the stock is owned by hedge funds and other institutional investors.
Insider Activity at Cloudflare In related news, CAO Janel Riley sold 3,481 shares of the company’s stock in a transaction that occurred on Tuesday, August 18th. The stock was sold at an average price of $305.26, for a total value of $1,062,610.06. Following the transaction, the chief accounting officer owned 41,547 shares in the company, valued at approximately $12,682,637.22. This represents a 7.73% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director John Graham-Cumming sold 2,520 shares of the stock in a transaction on Monday, August 10th. The shares were sold at an average price of $303.97, for a total value of $766,004.40. Following the transaction, the director directly owned 494,909 shares of the company’s stock, valued at approximately $150,437,488.73. This trade represents a 0.51% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 706,244 shares of company stock worth $186,761,866 over the last 90 days. Corporate insiders own 10.66% of the company’s stock.
Cloudflare Price Performance NET opened at $284.53 on Wednesday. Cloudflare, Inc. has a fifty-two week low of $158.83 and a fifty-two week high of $332.22. The firm has a 50-day moving average of $281.89 and a 200 day moving average of $236.66. The company has a debt-to-equity ratio of 1.22, a quick ratio of 1.82 and a current ratio of 1.82. The firm has a market cap of $100.57 billion, a P/E ratio of -490.57, a PEG ratio of 228.00 and a beta of 1.66. Cloudflare (NYSE:NET – Get Free Report) last announced its quarterly earnings data on Thursday, August 6th. The company reported $0.29 EPS for the quarter, topping the consensus estimate of $0.27 by $0.02. The business had revenue of $696.06 million for the quarter, compared to analyst estimates of $664.66 million. Cloudflare had a negative net margin of 8.21% and a negative return on equity of 3.88%. The company’s revenue for the quarter was up 35.9% on a year-over-year basis. During the same quarter in the previous year, the firm posted $0.21 earnings per share. Cloudflare has set its Q3 2026 guidance at 0.340-0.340 EPS and its FY 2026 guidance at 1.250-1.260 EPS. On average, research analysts expect that Cloudflare, Inc. will post 0.03 EPS for the current year.
Wall Street Analysts Forecast Growth A number of equities research analysts have issued reports on the stock. Citizens Jmp reaffirmed a “market outperform” rating and issued a $394.00 price objective on shares of Cloudflare in a research report on Monday, August 31st. Citigroup reissued a “market outperform” rating on shares of Cloudflare in a research report on Monday, August 31st. Wall Street Zen downgraded Cloudflare from a “buy” rating to a “hold” rating in a research note on Sunday. Deutsche Bank Aktiengesellschaft upgraded Cloudflare to a “buy” rating in a research note on Tuesday, July 7th. Finally, Royal Bank Of Canada upped their target price on Cloudflare from $290.00 to $346.00 and gave the company an “outperform” rating in a report on Friday, August 7th. One analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating, seven have assigned a Hold rating and four have assigned a Sell rating to the company’s stock. Based on data from MarketBeat, Cloudflare has a consensus rating of “Moderate Buy” and a consensus target price of $320.19.
Check Out Our Latest Stock Report on Cloudflare
Cloudflare Profile (Free Report)
Cloudflare, Inc is a technology company that provides cloud-based connectivity, security and performance services for websites, applications, networks and other internet-connected resources. Its platform is designed to help organizations deliver digital content more quickly, protect against cyber threats and manage internet traffic across a global network.
The company’s offerings include content delivery and domain name system services, distributed denial-of-service protection, web application and application programming interface security, bot management, and network security tools.
Further Reading Five stocks we like better than Cloudflare Tesla’s Robotaxi Launch Wasn’t the Moment Investors Expected Despite Post-Earnings Drop, Wall Street Analysts Eye New Highs for Broadcom Stock Morgan Stanley Eyes Good Things Ahead for Meta After $18 Billion Legal Settlement Q3 Earnings Could Be the Catalyst the Market Has Been Waiting For Want to see what other hedge funds are holding NET? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Cloudflare, Inc. (NYSE:NET – Free Report).
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Institutional Class shares of Columbia Select Mid Cap Growth Fund returned 26.69% for the period ending June 30, 2026. Contributors to relative performance Kioxia Holdings, Hut 8 and Sandisk. Detractors from relative performance Spotify, Cloudflare and Astera Labs.
Cloudflare (NET - Free Report) closed at $277.85 in the latest trading session, marking a -2.34% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.38%. Elsewhere, the Dow lost 0.51%, while the tech-heavy Nasdaq lost 0.29%.
The stock of web security and content delivery company has risen by 0.03% in the past month, lagging the Computer and Technology sector's gain of 2.81% and the S&P 500's gain of 2.08%.
The investment community will be paying close attention to the earnings performance of Cloudflare in its upcoming release. The company's upcoming EPS is projected at $0.34, signifying a 25.93% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $732.89 million, showing a 30.4% escalation compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.26 per share and a revenue of $2.87 billion, representing changes of +35.48% and +32.32%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Cloudflare. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 9.09% higher within the past month. As of now, Cloudflare holds a Zacks Rank of #3 (Hold).
From a valuation perspective, Cloudflare is currently exchanging hands at a Forward P/E ratio of 226.1. This expresses a premium compared to the average Forward P/E of 21 of its industry.
Meanwhile, NET's PEG ratio is currently 6.05. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Internet - Software industry stood at 1.1 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 74, which puts it in the top 31% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced Vulnerability Discovery and Remediation, available in early access through Cloudflare Managed Defense. Through the OpenAI Daybreak Defense Network, the service combines deep code investigation and automated patch generation using OpenAI Daybreak models, including GPT-5.6 Cyber, with real-time traffic and security context from Cloudflare's global network. Now, organizations can p.
Snowflake just delivered the kind of earnings report that can permanently reset expectations for a growth stock, and now investors face a harder question about what comes next after a single-day surge leaves almost no room for error.
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Snowflake (NYSE:SNOW | SNOW Price Prediction) stock is soaring 23% to $377.11 in Thursday trading after the cloud data platform delivered a much stronger-than-expected fiscal second quarter and raised its full-year outlook. Oracle (NYSE:ORCL) stock is advancing 3% to $150.26, while Cloudflare (NYSE:NET) stock is edging higher 2% to $276.90, adding to a broader positive reaction across several cloud and artificial intelligence names.
Snowflake’s second-quarter revenue climbed 35% year over year to $1.55 billion, topping the $1.48 billion analyst estimate, while adjusted earnings reached 62 cents per share versus expectations of 45 cents. Snowflake also raised its fiscal 2027 product-revenue forecast to $6.07 billion from $5.84 billion, representing 36% growth and a significant acceleration from its previous outlook.
AI Is Accelerating Snowflake’s Growth Snowflake’s product revenue increased 37% to $1.49 billion, marking the company’s third consecutive quarter of accelerating product-revenue growth. Snowflake’s remaining performance obligations also reached $9 billion, up 30% year over year, while the company added 692 net new customers during the quarter.
Snowflake’s AI products are becoming a more important part of that growth story. Snowflake’s CoCo coding agent surpassed 9,100 accounts and CoWork reached 5,800 accounts, giving Snowflake additional ways to monetize the data infrastructure that businesses need to support AI applications.
Oracle And Cloudflare Offer Different Comparisons Oracle stock is advancing 3% to $150.26 as investors continue to focus on Oracle’s rapidly expanding role in AI cloud infrastructure. Oracle’s business is much larger and more capital-intensive than Snowflake’s, but both companies could benefit as enterprises spend more on the infrastructure and software required to build and operate AI workloads.
Cloudflare stock is also edging higher 2% to $276.90, although Cloudflare has a different exposure to the cloud market through networking, security and application services. CoreWeave (NASDAQ:CRWV) stock is instead falling 0.8% to $80.29, providing a useful reminder that enthusiasm for AI infrastructure doesn’t lift every cloud-related name at the same time.
The WisdomTree Cloud Computing Fund (NASDAQ:WCLD) is up 3% to $42.30, offering a broader benchmark for the cloud software group. WCLD’s advance alongside Snowflake stock suggests the earnings reaction is helping sentiment beyond SNOW, although Snowflake’s 23% move is considerably stronger than the ETF’s gain.
Snowflake’s Guidance Raises the Stakes Snowflake’s new fiscal 2027 forecast calls for third-quarter product revenue of $1.588 billion to $1.593 billion, representing 37% to 38% year-over-year growth. Snowflake also raised its full-year non-GAAP operating-margin outlook to 14.5% from 13.5%, suggesting management expects to combine faster growth with improving operating leverage.
The bullish case is therefore becoming easier to articulate: Snowflake is showing accelerating growth at the same time that AI adoption is creating new workloads for its platform. Snowflake could have additional upside if CoCo, CoWork and other AI products encourage customers to consume more data and services through the company’s platform.
Valuation Remains the Biggest Question Snowflake’s 23% Thursday rally also raises the bar for future results. Snowflake’s stock had already appreciated substantially this year, and the latest surge means investors are now paying a higher price for continued acceleration in revenue, AI adoption and profitability.
The bear case is that expectations could become difficult to exceed after such a powerful move. Snowflake also remains unprofitable on a GAAP basis, with the company reporting a second-quarter net loss of $191.7 million, while stock-based compensation remains a significant expense.
Snowflake stock could continue benefiting if AI workloads translate into sustained consumption growth and the company’s raised guidance proves conservative. Investors can watch for whether Snowflake maintains its accelerating product-revenue growth while expanding margins, particularly as the stock moves into a much more demanding valuation range.
Snowflake has delivered the kind of earnings report that can reset expectations for a growth stock, and the combination of AI momentum and higher guidance gives the bulls a strong argument. Investors who want exposure to Snowflake’s AI and cloud opportunity should consider keeping their SNOW position sizes moderate, however, because a 23% single-day rally leaves considerably less room for disappointing results or a slowdown in growth.
Contact [email protected] for any questions or corrections.
Now SpaceXAI users have another way to run AI agents in environments they control, while Cloudflare expands the infrastructure powering the next generation of agentic software
SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced support for running Cursor Cloud Agents on Cloudflare Sandboxes, giving developers and platform teams a new way to run AI coding agents in secure, customer-controlled environments.
Bringing Cursor Cloud Agents to Cloudflare Sandboxes is another step toward making Cloudflare the execution layer for the next generation of agentic applications.
Share The integration builds on Cloudflare’s work with other leading AI agent platforms, including Devin Outposts and Claude Managed Agents, and reflects a simple shift in how agentic software is being deployed: developers want to keep the tools they already use, while enterprises want control over where agent work runs and how it accesses code, systems, and secrets. Cloudflare Sandboxes are becoming a natural execution layer for that model: secure, isolated environments where agent work can run closer to a customer’s code, systems, and security requirements.
Cursor Cloud Agents let developers assign coding tasks from the Cursor app, cursor.com, or the Cursor mobile app. With Cursor Self-Hosted Machines, Cursor continues to run the agent loop, including inference, planning, and orchestration, while the agent gets work done on a customer-selected worker. In SpaceXAI’s model, a worker is the customer-operated machine or environment that executes agent tasks; it is separate from Cloudflare Workers, Cloudflare’s serverless developer platform. With Cloudflare Sandboxes, that self-hosted worker can run in a sandbox environment in the customer’s Cloudflare account.
Developers keep the Cursor workflow they already use: they still start and manage agents from Cursor, and Cursor still routes the work and streams results back to the user. What changes is where the work happens. Tool calls, including terminal, filesystem, and browser actions, run inside customer-controlled Cloudflare sandbox environments, which matters for teams with strict requirements around where code, build caches, and secrets live. For organizations using Cursor Self-Hosted Machines across different execution environments, Cloudflare Sandboxes provide another controlled option for running agent workloads.
“Developers want powerful AI tools that fit naturally into their workflows, and enterprises need those tools to run in environments they control,” said Dane Knecht, Chief Technology Officer at Cloudflare. “Cloudflare Sandboxes gives teams the freedom to use the AI tools they prefer while giving organizations a secure, isolated place to run agent work. Bringing Cursor Cloud Agents to Cloudflare Sandboxes is another step toward making Cloudflare the execution layer for the next generation of agentic applications.”
Cursor Cloud Agents run via self-hosted machines use an outbound connectivity model. A Cursor worker runs the Cursor CLI and opens a long-lived outbound HTTPS connection to Cursor’s backend, where agent tool calls are sent over that connection. Cursor does not need to open an inbound connection into the customer’s network; teams can use the quickstart guide to configure a Cursor worker and connect it to their environment.
"SpaceXAI’s goal is to make agents useful wherever developers work,” said Toni Adams, Sr Director of Partnerships at SpaceXAI. “Self-Hosted Machines let teams keep Cursor workflows across desktop, web, and mobile while routing work to infrastructure they operate. Cloudflare Sandboxes give those teams an enterprise-grade option for running agent workloads in a controlled environment.”
The integration supports Cursor’s Self-Hosted Machines workflow for individual developers and teams. Developers can connect a single worker through My Machines, while enterprise teams can use Cursor self hosted worker pools as named routing targets that allow new agent chats to wait until an available worker claims them. Teams can create pools for different execution environments, then use pool orchestration to watch demand, start worker capacity when needed, and release it when sessions end.
During self-hosted operation, repositories, build caches, and secrets stay on the customer's machines. File chunks read by the model during inference, along with Cloud Agent artifacts such as screenshots, videos, and log references, are uploaded so they can appear in pull requests and dashboards. Teams that want to integrate self-hosted machine status or pool routing into their own systems can also use the Cloud Agents API.
Developers and platform teams can learn more about Cursor Self-Hosted Machines by visiting the Cloudflare tutorial, the Cursor quickstart, or the Cursor worker pools, pool orchestration, and Cloud Agents API documentation. To see how Cloudflare Sandboxes support other agent platforms, read more about Devin Outposts on Cloudflare and Claude Managed Agents on Cloudflare.
About Cloudflare
Cloudflare, Inc. (NYSE: NET) is the leading connectivity cloud company. It empowers organizations to make their employees, applications and networks faster and more secure everywhere, while reducing complexity and cost. Cloudflare’s connectivity cloud delivers the most full-featured, unified platform of cloud-native products and developer tools, so any organization can gain the control they need to work, develop, and accelerate their business.
Powered by one of the world’s largest and most interconnected networks, Cloudflare blocks billions of threats online for its customers every day. It is trusted by millions of organizations – from the largest brands to entrepreneurs and small businesses to nonprofits, humanitarian groups, and governments across the globe.
Learn more about Cloudflare’s connectivity cloud at cloudflare.com/connectivity-cloud. Learn more about the latest Internet trends and insights at https://radar.cloudflare.com.
Follow us: Blog | X | LinkedIn | Facebook | Instagram
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “explore,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words, or other similar terms or expressions that concern Cloudflare’s expectations, strategy, plans, or intentions. However, not all forward-looking statements contain these identifying words. Forward-looking statements expressed or implied in this press release include, but are not limited to, statements regarding the capabilities and effectiveness of Cloudflare Sandboxes and Cloudflare’s other products and technology, the benefits to Cloudflare’s customers from using Cloudflare Sandboxes and Cloudflare’s other products and technology, Cloudflare’s technological development, future operations, growth, initiatives, or strategies, and comments made by Cloudflare’s made by Cloudflare’s Chief Technology Officer and others. Actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Cloudflare’s filings with the Securities and Exchange Commission (SEC), including Cloudflare’s Quarterly Report on Form 10-Q filed on August 6, 2026, as well as other filings that Cloudflare may make from time to time with the SEC.
The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Cloudflare undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. Cloudflare may not actually achieve the plans, intentions, or expectations disclosed in Cloudflare’s forward-looking statements, and you should not place undue reliance on Cloudflare’s forward-looking statements.
Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced support for running Cursor Cloud Agents on Cloudflare Sandboxes, giving developers and platform teams a new way to run AI coding agents in secure, customer-controlled environments.
The integration builds on Cloudflare’s work with other leading AI agent platforms, including Devin Outposts and Claude Managed Agents, and reflects a simple shift in how agentic software is being deployed: developers want to keep the tools they already use, while enterprises want control over where agent work runs and how it accesses code, systems, and secrets. Cloudflare Sandboxes are becoming a natural execution layer for that model: secure, isolated environments where agent work can run closer to a customer’s code, systems, and security requirements.
Cursor Cloud Agents let developers assign coding tasks from the Cursor app, cursor.com, or the Cursor mobile app. With Cursor Self-Hosted Machines, Cursor continues to run the agent loop, including inference, planning, and orchestration, while the agent gets work done on a customer-selected worker. In SpaceXAI’s model, a worker is the customer-operated machine or environment that executes agent tasks; it is separate from Cloudflare Workers, Cloudflare’s serverless developer platform. With Cloudflare Sandboxes, that self-hosted worker can run in a sandbox environment in the customer’s Cloudflare account.
Developers keep the Cursor workflow they already use: they still start and manage agents from Cursor, and Cursor still routes the work and streams results back to the user. What changes is where the work happens. Tool calls, including terminal, filesystem, and browser actions, run inside customer-controlled Cloudflare sandbox environments, which matters for teams with strict requirements around where code, build caches, and secrets live. For organizations using Cursor Self-Hosted Machines across different execution environments, Cloudflare Sandboxes provide another controlled option for running agent workloads.
“Developers want powerful AI tools that fit naturally into their workflows, and enterprises need those tools to run in environments they control,” said Dane Knecht, Chief Technology Officer at Cloudflare. “Cloudflare Sandboxes gives teams the freedom to use the AI tools they prefer while giving organizations a secure, isolated place to run agent work. Bringing Cursor Cloud Agents to Cloudflare Sandboxes is another step toward making Cloudflare the execution layer for the next generation of agentic applications.”
Cursor Cloud Agents run via self-hosted machines use an outbound connectivity model. A Cursor worker runs the Cursor CLI and opens a long-lived outbound HTTPS connection to Cursor’s backend, where agent tool calls are sent over that connection. Cursor does not need to open an inbound connection into the customer’s network; teams can use the quickstart guide to configure a Cursor worker and connect it to their environment.
"SpaceXAI’s goal is to make agents useful wherever developers work,” said Toni Adams, Sr Director of Partnerships at SpaceXAI. “Self-Hosted Machines let teams keep Cursor workflows across desktop, web, and mobile while routing work to infrastructure they operate. Cloudflare Sandboxes give those teams an enterprise-grade option for running agent workloads in a controlled environment.”
The integration supports Cursor’s Self-Hosted Machines workflow for individual developers and teams. Developers can connect a single worker through My Machines, while enterprise teams can use Cursor self hosted worker pools as named routing targets that allow new agent chats to wait until an available worker claims them. Teams can create pools for different execution environments, then use pool orchestration to watch demand, start worker capacity when needed, and release it when sessions end.
During self-hosted operation, repositories, build caches, and secrets stay on the customer's machines. File chunks read by the model during inference, along with Cloud Agent artifacts such as screenshots, videos, and log references, are uploaded so they can appear in pull requests and dashboards. Teams that want to integrate self-hosted machine status or pool routing into their own systems can also use the Cloud Agents API.
Developers and platform teams can learn more about Cursor Self-Hosted Machines by visiting the Cloudflare tutorial, the Cursor quickstart, or the Cursor worker pools, pool orchestration, and Cloud Agents API documentation. To see how Cloudflare Sandboxes support other agent platforms, read more about Devin Outposts on Cloudflare and Claude Managed Agents on Cloudflare.
About Cloudflare
Cloudflare, Inc. (NYSE: NET) is the leading connectivity cloud company. It empowers organizations to make their employees, applications and networks faster and more secure everywhere, while reducing complexity and cost. Cloudflare’s connectivity cloud delivers the most full-featured, unified platform of cloud-native products and developer tools, so any organization can gain the control they need to work, develop, and accelerate their business.
Powered by one of the world’s largest and most interconnected networks, Cloudflare blocks billions of threats online for its customers every day. It is trusted by millions of organizations – from the largest brands to entrepreneurs and small businesses to nonprofits, humanitarian groups, and governments across the globe.
Learn more about Cloudflare’s connectivity cloud at cloudflare.com/connectivity-cloud. Learn more about the latest Internet trends and insights at https://radar.cloudflare.com.
Follow us: Blog | X | LinkedIn | Facebook | Instagram
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “explore,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words, or other similar terms or expressions that concern Cloudflare’s expectations, strategy, plans, or intentions. However, not all forward-looking statements contain these identifying words. Forward-looking statements expressed or implied in this press release include, but are not limited to, statements regarding the capabilities and effectiveness of Cloudflare Sandboxes and Cloudflare’s other products and technology, the benefits to Cloudflare’s customers from using Cloudflare Sandboxes and Cloudflare’s other products and technology, Cloudflare’s technological development, future operations, growth, initiatives, or strategies, and comments made by Cloudflare’s made by Cloudflare’s Chief Technology Officer and others. Actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Cloudflare’s filings with the Securities and Exchange Commission (SEC), including Cloudflare’s Quarterly Report on Form 10-Q filed on August 6, 2026, as well as other filings that Cloudflare may make from time to time with the SEC.
The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Cloudflare undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. Cloudflare may not actually achieve the plans, intentions, or expectations disclosed in Cloudflare’s forward-looking statements, and you should not place undue reliance on Cloudflare’s forward-looking statements.
Cybersecurity and connectivity cloud provider Cloudflare introduced a new way to fight cyberattacks, according to a Monday (Aug. 31) press release. Adaptive Intelligence is a continuous real-time detection engine built to counter automated cyber threats by increasing operational costs for attackers, the release said.
SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced Adaptive Intelligence, a new continuous detection engine built directly into Cloudflare Bot Management. Powered by insights from trillions of requests across Cloudflare's massive global network, Adaptive Intelligence autonomously learns from the meta-signals of live traffic, generating short-lived rules that make automated attacks far too expensive and time-consuming to continua.
Cybersecurity has been a hot industry for several years, with Grand View Research projecting an 11.9% compound annual growth rate (CAGR) through 2033. However, artificial intelligence (AI) is heating up the need for cybersecurity.
Each AI agent and model needs cybersecurity. Furthermore, hackers can use AI to hack more targets, and cybersecurity companies use AI to deter those attackers.
Cloudflare (NET -2.72%) and Palo Alto Networks (PANW -2.94%) are at the forefront of this opportunity. They both generate annual recurring revenue from leading companies, but there are a few things to consider when comparing these stocks.
Image source: Getty Images.
Palo Alto has better margins and is more mature Palo Alto Networks is the most established cybersecurity platform. It earned $3 billion in its fiscal 2026 third quarter, ended April 30, while Cloudflare only generated $696.1 million in the second quarter. It is also profitable, while Cloudflare is still burning through cash. Although its fiscal 2026 third quarter wasn't profitable, that was mainly due to merger and acquisition (M&A) expenses. It had been profitable in the first and second quarters of its fiscal 2026.
Cloudflare continues to report operating losses. A generally accepted accounting principles (GAAP) loss equivalent to 30% of revenue in the second quarter was higher than usual due to one-time severance costs. Q1 does not reflect severance and yielded an operating loss equal to 10% of total revenue.
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Cloudflare is growing faster Cloudflare's strength in this comparison is the fact that it's growing faster without leaning heavily into acquisitions. For instance, Cloudflare delivered 36% year-over-year revenue growth in this quarter, compared to Palo Alto Networks' 31% growth rate.
However, the advantage skews more toward Cloudflare when reading the fine print. Palo Alto Networks' revenue growth is partially fueled by its recent acquisitions of CyberArk and Chronosphere, which contributed $388 million of the company's $3 billion in sales in the quarter. That's more than 10% of total revenue that came from acquisitions instead of organic growth.
If Cloudflare can maintain elevated growth rates and scale margins quickly once it becomes profitable, then it has a real shot at outperforming Palo Alto Networks in the long run.
Not all investors are banking on that scenario. Palo Alto Networks has comfortably outpaced Cloudflare in year-to-date returns, and valuation differences may explain why. Palo Alto Networks trades at a high 25 price-to-sales ratio, but that level is pretty low compared to Cloudflare's 41 P/S ratio. Higher growth rates also come with higher expectations, and a lot of future growth is already priced into Cloudflare shares.
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Cloudflare and Palo Alto Networks provide critical cybersecurity solutions to the world's largest companies. As the AI build-out intensifies, these companies will experience heightened demand for cybersecurity solutions.
Palo Alto Networks is the better-known name in the industry and is more suitable for investors who want to incur less risk. If Cloudflare achieves profitability and quickly scales it, the company may be a better buy.
Although Cloudflare is growing faster, its growth rate will eventually decelerate. That has been the common pattern for many maturing cybersecurity and tech companies. This risk also affects Palo Alto Networks, but it has a far more reasonable valuation than Cloudflare.
Even though Palo Alto Networks has already outpaced Cloudflare, it's likely that the trend will continue. The recent acquisitions have boosted Palo Alto Networks' market share in the cybersecurity industry.
Palo Alto Networks also has projected sequential growth on its side. The company guided for $3.35 billion in fiscal Q4 revenue at its midpoint, which implies a 12% sequential gain. Cloudflare's guidance pointed to $736.5 million at the midpoint, which only suggests a 6% quarter-over-quarter boost.
Key Takeaways Cloudflare added nearly 2 million developers in Q2, bringing its platform total above 7.4 million.Workers is gaining enterprise traction through pool-of-funds contracts and growing customer usage.AI agent adoption could boost Workers as customers build, deploy and scale AI agents on the platform. Cloudflare’s (NET - Free Report) Workers developer platform is becoming an increasingly important part of its growth strategy. During the second quarter of 2026, the company said its Workers platform continued to drive new customer adoption. Cloudflare ended the second quarter with more than 7.4 million developers on its platform, adding nearly two million developers in the second quarter alone. This was more than the 1.5 million developers added during all of 2025.
Cloudflare’s Workers developer platform is also gaining traction among enterprise customers. Cloudflare said more customers are including Workers in pool-of-funds contracts, allowing them to use the developer platform along with services such as Zero Trust and reverse proxy. For example, an APAC technology company signed a $4 million pool-of-funds contract for Workers after previously signing an $8.7 million Application Services contract. Another technology company signed a $6 million Workers contract to support its AI agent capabilities.
Cloudflare said the Workers platform has moved beyond being mainly an adoption-focused product and has become a meaningful contributor to revenues. The company also noted that the Workers platform is driving consumption as customers use it alongside its security and networking products. This creates an opportunity for Cloudflare to expand its relationships with existing customers as their developer teams increase their use of the platform.
The growing use of AI agents could provide another boost to the Workers Platform, which is designed to help customers build, deploy and scale AI agents. With AI workloads increasing and more developers joining the platform, Workers could become a key contributor to Cloudflare’s overall growth. The Zacks Consensus Estimate for Cloudflare’s 2026 and 2027 revenues indicates year-over-year growth of 32.3% and 28.5%, respectively.
Cloudflare Faces Tough CompetitionCompetitors like Palo Alto Networks (PANW - Free Report) and Zscaler (ZS - Free Report) are also gaining ground through platform expansion and AI innovation.
Palo Alto Networks’ wide range of innovative products, strong customer base and growing opportunities in areas like Zero Trust and SASE continue to support its long-term growth potential. In the third quarter of fiscal 2026, SASE was Palo Alto Networks’ fastest-growing segment, with SASE Annual recurring revenues up 40% year over year. PANW's SASE business is benefiting from strong customer demand for cloud-delivered networking and security solutions as enterprises continue to support hybrid work environments and secure access to cloud applications.
Zscaler is seeing strong adoption of its Zero Trust Everywhere strategy, which is helping the company expand beyond its traditional user security offerings. The strategy combines security for users, cloud workloads and branch locations on a single platform. The company ended the third quarter of fiscal 2026 with more than 700 Zero Trust Everywhere enterprises, up from more than 550 in the previous quarter. As more customers adopt multiple products across the platform, Zero Trust Everywhere could help Zscaler increase customer spending, win larger deals and support long-term growth.
NET’s Price Performance, Valuation & EstimatesShares of Cloudflare have jumped 40.7% in the year-to-date period against the Zacks Internet – Software industry’s decline of 4.5%.
NET YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, NET trades at a forward price-to-sales ratio of 28.87, significantly higher than the industry’s average of 3.91. The Zacks Value Score of F suggests that NET stock is overvalued.
NET Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NET’s 2026 earnings is pegged at $1.26 per share, revised up by a penny over the past seven days, indicating a 35.5% increase from the previous year.
Image Source: Zacks Investment Research
Cloudflare currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fintech giant Stripe is acquiring OpenRouter, a leading artificial intelligence (AI) model gateway, in a deal reportedly worth $7.5 billion. That's nearly six times the $1.3 billion valuation estimated by The New York Times following its latest funding round in May. The premium is due in part to Stripe having outbid other tech players, including Databricks, for the company.
OpenRouter gives developers access to nearly any model from more than 80 providers while taking a small cut of every bill. The company now processes more than 10 trillion tokens per day, roughly triple its pace in May, for a community of over 10 million developers and companies.
Image source: Getty Images.
How OpenRouter earns its keep OpenRouter charges a 5.5% take rate on the spending that flows through its platform. While the company is private, some estimates put annualized revenue at $140 million in July, up from nearly $50 million at the start of the year.
Stripe, which is also privately held, built its business helping companies collect money online. Now it can do the same with tokens, collecting from developers and AI-native start-ups as they scale.
Both companies are toll collectors, and this acquisition will expand Stripe's currency base. Where it typically spends to grow its transaction volume, these tolls will rise on their own as AI adoption spreads. Stripe's fraud screening also helps prevent the stolen-card purchases and token reselling that plague small AI marketplaces.
What a router does depends on who you ask. Today, OpenRouter operates primarily as a gateway. Developers choose their own model, and the platform forwards the request and takes its fee. Most users want that control and know which models fit which tasks.
The company's nascent Auto Router tool reads each prompt and picks the model itself. That fits the needs of large enterprises where otherwise, thousands of employees would each need to know which model suits which task and keep up as new models arrive every few months.
If enterprise AI adoption is going to proliferate in the coming years, developing automatic routing capabilities could be quite valuable. Whichever company eventually gets it right could become the provider of choice.
The Cloudflare precedent Cloudflare (NET -2.72%) spent years providing the free security layer that millions of websites sat behind, then converted that traffic into paid computing and security contracts over the course of a decade. Its AI Gateway now does similar work, sitting in front of model calls.
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OpenRouter is somewhere close to where Cloudflare stood before its enterprise business took off. Its role as a distribution channel was on display just days after the announcement. An anonymous model called Ox Alpha appeared and quickly became the most-used model on OpenRouter, processing 23.2 trillion tokens in less than a week.
The business model has its challengers. Amazon, Microsoft, and Alphabet all bundle similar multimodel routing for free.
It looks like Stripe is betting on the growth of AI-native start-ups and the long-term potential of building an automated routing business. In its recent investor letter, the fintech company argues developers will soon need to manage intelligence pipelines the way Stripe already lets them manage revenue pipelines.
Cloudflare just cleared the government's highest civilian security bar, giving it access to contracts it was previously locked out of entirely. Whether that clearance turns into the kind of compounding federal revenue Palantir built depends on a template that has…
Cloudflare has secured FedRAMP High authorization for Cloudflare for Government, and the timing matters more than the acronym suggests. That clearance allows federal customers to run highly sensitive workloads on the platform, including those related to national security, critical infrastructure, and financial systems.
More than 100 federal agencies already use Cloudflare, including the departments of State, Justice, Homeland Security, Energy, and Commerce. The question the headline poses is whether that installed base plus a higher clearance level makes Cloudflare (NYSE:NET | NET Price Prediction) the next Palantir (NASDAQ:PLTR). The straightforward answer is that it earns Cloudflare the right to compete for the kind of contracts Palantir already wins, which is quite different from winning them.
What FedRAMP High Actually Buys FedRAMP High is the top civilian bar for cloud services handling sensitive federal data, above the Moderate and Low tiers. Achieving High means Cloudflare can sell Zero Trust security, application services, and developer tools into workloads previously off-limits, layered on top of the web performance and DDoS protection agencies already buy.
The authorization announcement and the FedRAMP Marketplace listing confirm the clearance, but they do not produce revenue on their own. Cloudflare still has to displace incumbents contract by contract.
The Q2 call showed what that looks like when it works. Management described a large U.S. federal agency signing a five-year, $7.7 million contract for Magic Transit and Network Firewall after a legacy provider’s outage locked over 100,000 users out of a mission-critical system for days.
That is the template Cloudflare needs to repeat: an incident, a proof point, and then a platform decision. The pattern of an early government foothold compounding into something much larger is exactly what we reverse-engineered from prior tech winners in a free playbook you can grab here.
Interrogating the Palantir Comparison Palantir and Cloudflare share a story arc in which a government beachhead compounds into larger, longer-lived enterprise deals. Their economics differ. Palantir sells bespoke data integration and AI software at very high gross margins, while Cloudflare runs a network with real capital costs and reported a 71.8% GAAP gross margin in Q2, down from 74.9% a year earlier.
Investors are already pricing in the comparison. NET trades at a price-to-sales ratio of 43.69, with a forward P/E near 217x, making it richer than most infrastructure peers. The 52.09% year-to-date rally to $299.84 suggests the market is pricing in optionality rather than questioning it.
What to Watch From Here Revenue growth is accelerating. Q2 came in at $696.06 million, up 35.87% year-over-year, the fourth consecutive quarter of acceleration, and management raised full-year guidance to $2.864 billion to $2.870 billion. Large-customer momentum matters more than the federal narrative in the near term, and Cloudflare ended the quarter with 4,698 customers paying more than $100,000 per year, up 27%.
The restructuring is the wildcard. Cloudflare took a $150.69 million charge tied to what CEO Matthew Prince calls an “agentic AI-first operating model,” which included a workforce reduction of roughly 1,100 people. That is a bet that agents are the future users of the web.
Prince framed the opportunity directly: “As the web shifts to AI answer engines and agent-driven commerce, we are seeing a fundamental rewrite of the Internet for machine-to-machine traffic.” The real tests are the pending Department of Defense Impact Level 4 authorization and whether FedRAMP High converts into named agency wins over the next four quarters. Until then, treat this as permission to compete, priced as if the wins are already booked.
Contact [email protected] for any questions or corrections.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +23.8% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cloudflare (NET - Free Report) Headquartered in San Francisco, CA, Cloudflare is a global cloud services provider that delivers a suite of deeply integrated products, including website and application services solutions, Cloudflare One, developer-based solutions and consumer offerings.
NET is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Computer and Technology stock. NET has a Momentum Style Score of A, and shares are up 11.8% over the past four weeks.
10 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.06 to $1.26 per share. NET boasts an average earnings surprise of +9.3%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, NET should be on investors' short list.
On August 19, 2026, Cloudflare Inc NET shares fell 3.1% to a current price of $291.88, within a 52-week range of $158.83 to $332.22. The decline today adds to a 6.3% drop over the past week but reflects a strong year-to-date gain of 48.0% and a 48.5% increase over the past year.
GF Value™ verdict: Current price of $291.88 vs. GF Value of $187.47, indicating a 55.7% overvalued status.GF Score™: 75/100, indicating an above-average overall rating.Most notable signal: Insider activity shows $737.2 million in sales over the past 12 months, with no insider buying.Is NET Overvalued or Undervalued?Cloudflare's current price significantly surpasses its GF Value™, which is estimated at $187.47. This indicates that shares are currently overvalued by 55.7%. The GF Value™ is GuruFocus' proprietary estimate of intrinsic value, derived from historical trading multiples, past growth, and future performance expectations. Such a wide gap between the current price and GF Value™ signals a considerable margin of safety for potential investors, highlighting the risk of a price correction in the future.
Furthermore, the GF Valuation label categorizes Cloudflare as "Significantly Overvalued," which suggests that the stock's price may not be sustainable in the long term. Given that Cloudflare is currently unprofitable and cash-flow-negative, traditional earnings-based valuation metrics like Price-to-Earnings (P/E) are not applicable. Instead, a Price-to-Sales (P/S) analysis would provide more insight into the company's valuation in relation to its historical performance.
How Does NET's Valuation Compare to Its History?MetricCurrentHistoricalForward P/E227.5xN/AAs Cloudflare is unprofitable, a direct comparison of P/E ratios over the last five years is not feasible. Instead, the forward P/E ratio of 227.5x emphasizes the disconnect between current pricing and historical valuation norms. This analysis aligns with the GF Value™ verdict, which indicates that the stock is significantly overvalued.
What Does NET's GF Score™ Tell Us?The GF Score™ measures a company's overall quality based on factors such as financial strength, profitability, growth potential, valuation, and momentum. Cloudflare's GF Score™ of 75/100 indicates that the company is rated above average, although there are notable strengths and weaknesses within its sub-categories.
MetricRatingGF Score™75Financial Strength5/10Profitability3/10Growth10/10Valuation3/10Momentum9/10While Cloudflare excels in growth with a perfect score of 10/10, its financial strength and profitability scores are relatively weak at 5/10 and 3/10, respectively. These mixed signals indicate the company's strong growth potential but also highlight significant concerns regarding its current financial viability.
What Are Gurus and Insiders Doing with NET?A total of 15 gurus currently hold Cloudflare shares, with 7 increasing their positions and 10 reducing their holdings in recent quarters. This mixed sentiment among seasoned investors reflects varying confidence levels in the stock's future performance. Additionally, insider selling of $737.2 million over the past 12 months, with no buying activity, raises concerns about the leadership's confidence in the company's near-term prospects.
The notable insider selling suggests that those closest to the company are not optimistic about immediate growth or profitability, which could signal a lack of confidence in the stock’s current valuation. This pattern of selling, coupled with the high level of guru trimming, adds to the caution surrounding Cloudflare's current market position.
What This Means for InvestorsBased on the GF Value™ assessment, Cloudflare Inc NET is currently overvalued at a price of $291.88, significantly exceeding its intrinsic value estimate of $187.47. Given the risk associated with its high valuation metrics and the concerning insider selling trends, potential investors should proceed with caution. For further insights and detailed analysis, visit the Cloudflare Inc (NET) stock page.
Frequently Asked QuestionsWhat is NET's GF Score™?
Cloudflare's GF Score™ is 75/100, indicating an above-average rating based on various quality measures.
Is NET overvalued or undervalued?
Cloudflare is currently overvalued, with a GF Value™ of $187.47 compared to its current price of $291.88, reflecting a significant premium.
What is NET's P/E ratio?
Cloudflare has a forward P/E ratio of 227.5x, emphasizing its unprofitability and the challenge of applying traditional valuation methods.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Disclosures I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.
Key Takeaways PANW's SASE ARR grew 40%, while Secure Browser licenses reached 11 million in the third quarter.NET's AI-agent traffic is driving security demand while raising infrastructure costs and pressuring margins.PANW trades at a 22.63X forward sales multiple, well below NET's 33.04X, offering an attractive valuation. Palo Alto Networks (PANW - Free Report) and Cloudflare (NET - Free Report) are both at the forefront of the cybersecurity space, playing key roles in guarding organizations from extensive cyberattacks. PANW focuses broadly on next-generation firewalls, cloud security and AI-driven threat detection. Cloudflare provides a cloud-native platform spanning network security, application security and connectivity.
Both PANW and NET are riding the key industry trends, driven by the mounting incidents of credential theft, remote desktop protocol breaches and social engineering-based strikes by malicious actors. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for PANW StockPalo Alto Networks remains a cybersecurity leader, offering solutions for network security, cloud security and endpoint solutions for customers who need full enterprise security support. Its next-generation firewalls and advanced threat detection technologies are widely recognized and adopted globally.
Palo Alto Networks’ wide range of innovative products, strong customer base and growing opportunities in areas like Zero Trust, Secure Access Service Edge (SASE) and private 5G security continue to support its long-term growth potential. For example, in the third quarter of fiscal 2026, SASE was Palo Alto Networks’ fastest-growing segment, with SASE Annual recurring revenues (ARR) increasing 40% year over year. PANW's SASE business is benefiting from strong customer demand for cloud-delivered networking and security solutions as enterprises continue to support hybrid work environments and secure access to cloud applications.
Customer wins remain a key contributor to growth. Year to date, PANW recorded nearly 50 displacement wins worth $200 million in contract value. These wins came from customers replacing competing networking and security products with PANW's platform. Management noted that many enterprises are increasingly looking to reduce the number of vendors they work with and prefer a single platform that combines networking, security and policy management capabilities. This trend is helping PANW gain market share in the SASE market.
Another growth driver is strong momentum in Secure Browser adoption as organizations are adopting browser security solutions to improve visibility and control over employee activity and data access. Secure Browser reached 11 million licenses in the third quarter, up four times compared with the year-ago period, as more employees increase their usage of cloud applications and AI tools through web browsers.
PANW also benefits from its large installed base of firewall customers. Existing customers can extend the same security policies across their networks and SASE environments without adding another vendor. With $1.6 billion in SASE ARR, 40% year-over-year growth, strong competitive wins and rising Secure Browser adoption, SASE is becoming a larger and more meaningful contributor to Palo Alto Networks' long-term growth.
The Case for NET StockCloudflare is seeing stronger demand for its SASE and Zero Trust offerings as companies look to adopt AI more securely. Management said the key reason big companies are approaching Cloudflare is that they know they need AI but want to deploy it securely. This is creating new opportunities for the company’s SASE and Zero Trust platforms, particularly as enterprises need to secure AI agents in addition to human users.
Cloudflare believes its developer-focused approach gives it an advantage in this market. Management said companies will have more AI agents working across their organizations and will need a security model designed for these agents. In one example, a large U.K. government agency was evaluating a first-generation Zero Trust provider but reconsidered the project after discussing its plans for AI agents with Cloudflare. Management said the agency canceled its existing request for proposal and is now reevaluating the project with an agents-first approach. Cloudflare believes its developer-focused approach has helped its SASE and Zero Trust platforms gain significant share over the past six months.
Customer wins in the quarter also show demand for Cloudflare’s security platform. A Fortune 100 technology company signed a $5.2 million, three-year contract for Cloudflare’s full SASE portfolio. The customer is replacing legacy VPNs and virtual desktops and moving its global workforce to a single Zero Trust platform. Cloudflare beat two first-generation Zero Trust vendors in the deal because of its network performance and unified management, with the customer expecting to operate the services with roughly one-third the staff.
In the second quarter, more than 50% of the traffic flowing across NET’s network was nonhuman, reflecting the rapid increase in AI-agent and machine-to-machine traffic. However, higher traffic also means Cloudflare needs to support more compute, storage, networking and infrastructure capacity, all of which would incur higher costs. These higher costs are weighing on Cloudflare's gross margins. In the second quarter of 2026, NET’s gross margin declined 320 basis points on a year-over-year basis. If this trend persists, strong revenue growth may not translate into similar growth in gross profit.
How do Earnings Estimates Compare for PANW & NET?The Zacks Consensus Estimate for PANW’s fiscal 2026 and 2027 EPS is pegged at $3.77 and $4.10, respectively. The estimates for fiscal 2026 have remained unchanged over the past 30 days, while the same for fiscal 2027 have been revised up by 2 cents over the past 30 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NET’s 2026 and 2027 EPS is pegged at $1.21 and $1.66, respectively. The estimates for 2026 and 2027 have been revised up by a penny and 2 cents, respectively, over the past 30 days.
Image Source: Zacks Investment Research
PANW vs. NET: Price Performance and ValuationYear to date, shares of PANW have surged 108.6%, while NET shares have returned 60.2%.
PANW Vs. NET: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, PANW is trading at a forward sales multiple of 22.63X, significantly lower than NET’s forward sales multiple of 33.04X. PANW’s reasonable valuation makes it more attractive for investors looking for value and stability.
PANW vs. NET: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: PANW Has an Edge Over NETBoth Palo Alto Networks and Cloudflare are key players in the cybersecurity space, but their near-term outlooks are quite different. Cloudflare faces near-term risks from rising costs due to the rapid rise of AI-agent traffic, which is hurting the company’s margins.
In contrast, PANW shows steadier execution, where the company is witnessing strong adoption of its security products. Further, PANW’s reasonable valuation offers some downside protection as well, giving PANW a clear edge over NET for investors seeking exposure to cybersecurity growth at a fair price.
Currently, PANW carries a Zacks Rank #2 (Buy), giving the stock a clear edge compared to Cloudflare, which has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Jon Quast, Matt Frankel, and Tyler Crowe discuss:
Agentic AI internet traffic surpasses human traffic.The investment opportunities increase exponentially if agentic traffic increases.The government's investment in mining education.Whether there are buying opportunities for mining stocks.Why Intel is raising cash.To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.
A full transcript is below.
This podcast was recorded on Aug. 11, 2026.
Jon Quast: The Internet might be about to get weird. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm your host today, Jon Quast. Joining me today are guests, longtime Fool contributors Matt Frankel and Tyler Crowe. Me and Tyler are switching seats today. But today, we're talking about some mining stocks, as well as a $15 billion move from Intel.
But first, I want to talk about this bit of news. Earnings season always a busy time, and sometimes things get lost in the commotion. One of the things that I feel like got lost was when Cloudflare reported its second-quarter earnings on August 6th. Now, this is a top 10-ranked stock in the Motley Fool Hidden Gems universe. But the report was great; investors responded fine, but buried in the earnings commentary on the call, co-founder and CEO Matthew Prince was talking about AI-agentic traffic on the Internet. Saying that for the first time, AI agents surpassed human activity on its network in May. The company had projected this to happen already, but it's happening faster than its timeline. Then they went on to say that they actually expect AI agent traffic on the web to be 1,000 times bigger than human traffic within the next five years. Growth is something that is so important to investing. It's something that caught my eye when I saw this statement. But Matt and Tyler, I want to get your reactions first here. What do you think about this statement from Matthew Prince?
Matt Frankel: On one hand, I understand the logic, even though I think the 1,000x figure might be a little bit too ambitious. The agentic AI traffic, it increased by about 18x over the past 12 months, and 1,000 times in five years would mean roughly quadrupling every year for the next five years. That would actually be a deceleration from what we've seen. There's also the case to be made that human Internet traffic has a natural ceiling. We can only look up so much stuff. We can only perform so many tasks at a time. There's a reason that human-driven Internet traffic has only grown at a low single-digit rate for about the past decade. Agents don't have this natural ceiling. It only depends on the cost of doing the work. How many tasks we give them to do. Obviously, there's no limit to the ladder there. Costs are falling, and usage is rising 1,000x in five years. As I mentioned, it could be a stretch, but the costs are certainly heading in the right direction. The token costs: they've dropped by an order of magnitude over the past two years, and we've seen roughly a 100x increase in usage. If that pattern of decreasing cost continues, agentic AI usage could soar. I don't know about 1,000x, but a lot higher.
Tyler Crowe: I want to compare this to that. If you double a penny every day for a month, we have like $5.6 million. Yes, the math says it works out that way, and doubling early numbers, like we've seen recently, makes sense. But eventually, that pace does become somewhat unsustainable. We see this investing all the time: the S-curve of investing, things accelerate, and then they eventually decelerate. We see it with companies, revenue trajectories, all the time. Because agentic web traffic is happening behind the scenes doesn't mean it's without cost. Yes, costs are declining, but there is cost to it, and there will be some inflection point where the compute costs for all this agentic web traffic impede growth. Someone somewhere looking at their AI cost spending will need to see an ROI on this. For all this bought traffic, that's what they're doing; eventually, they're going to have to see a return. If they're not seeing it, they're not going to be spending on it because otherwise, what's the point?
Jon Quast: It sounds like both of you then are a little bit skeptical on the 1,000x number, and that's fair. If you believe that Cloudflare is blowing some smoke here, feel free to say so. But I do want to imagine here. I do want to project. I want to look into the future. Let's say, by 2030, if at least this is directionally right that the share of agentic AI traffic is going to continue to increase at a large rate compared to the human traffic — will the Internet look different in five years? What changes would happen? What would be different from our perspective? What would it look like?
Matt Frankel: Like I said, I'm not totally sold on the 1,000x figure or that it's going to be anything close to that. But let's assume for a minute that that proves to be accurate. The main thing that I see that would be very different is how money is made on the Internet. In Prince's comments, he correctly says that the general business model of the Internet has been defined by advertising for almost three decades, and this could change. If 0.01% of your views are going to be human, then why would you advertise as if humans were going to be looking at your page? I'm not exactly sure what that might look like, but advertisers would need to figure out new ways to reach customers in an agentic world, maybe reach them through agents. The ways that publishers sell ad space based on impressions might not work well anymore if only one or two out of every 10,000 impressions is made to a human being.
Jon Quast: I mean, when you think about how much of the Internet is built around this whole concept of advertising and being open in that way, that is actually a really profound change that would possibly be occurring there, Matt. I appreciate you bringing that up, but Tyler, I want you to weigh in here as well.
Tyler Crowe: I'm probably going to sound like a curmudgeon throughout most of this segment, but I am taking the under on this 1,000x AI agent traffic. This really does sound like Prince is talking his book, because obviously, Cloudflare would benefit immensely from exponential web traffic growth. It's not what he's saying, but why he might be saying it. A little bit of the incentives matter in these statements. In terms of changing the Internet, we've already seen this happen with mobile-friendly webpages in the explosion of search engine optimization for the past seven to 10 years. We have that hamburger-looking drop-down menu; that's because we wanted mobile-friendly design for search engine optimization.
Web pages are written for two audiences: you have the human, and then you have the Google's search engine algorithm. If you've ever wondered why a single online recipe page became a 10,000-word novella. They're witnessing like an SEO nuclear arms race in full effect. Pieces are scored better with keywords and phrases without much penalty for length. You get to this point, and Herman Melville will almost be like, I might want to cut that down a little bit. Projecting this agentic web search in assuming Princes, I don't know, directionally correct with what he's saying here. We're going to get AI agent-optimized webpages. If I'm building a site where I know so little of my traffic is human, why would I even build it for humans?
Jon Quast: That's such a good comparison on the shift that we made to mobile web. That, of course, created lots of opportunities in the market. There were profound changes that happened to the Internet, and there were companies that made money and investors who won. I think that's really what our listeners care about most here as we consider how the Internet might be changing and the changes that we're already seeing. I want to leave this final question here for both of you. If we are going to start building a web that is focused towards these agents. What might that create as far as investing opportunities?
Matt Frankel: If overall Internet traffic is about 1,000x, I'm most bullish on the companies that make the infrastructure work. I'm talking about the companies that provide the power infrastructure data centers need. The cooling systems, which is becoming an increasing problem as they get more complex and dense; the heat island thing is a real problem. Other things that will likely surge in demand, if that 1,000x prediction is correct, but I would caution that even if we're directionally correct about this opportunity, agentic AI really taking over Internet traffic, the valuation of all these stocks still matters. Some of my favorite AI infrastructure companies are trading for pretty high multiples right now, especially for a value investor like me. As an example, everybody was 100% correct that the Internet was going to revolutionize the world in 1999. It took Cisco 17 years to come back to its previous high after the bubble burst. GE Vernova, Quanta Services — those are two companies that come to mind that I would love to own, but I'd probably wait for a more attractive valuation before you'll actually find them in my portfolio.
Jon Quast: How about you, Tyler?
Tyler Crowe: Jon, I apologize in advance because I'm going to commit one of the worst sins in media. I'm going to say I'm not really sure yet. I know it's happening. I'm still trying to wrap my head around the mechanics of it. Yes, it does support the AI infrastructure build-out narrative. But isn't that already baked into AI's potential in the current compute demand projections that we have out there? Maybe this is an added data point that the AI infrastructure build-out has that extra leg to stand on, and maybe we don't have to worry as much about, oh, this is all super inflated because now we're starting to see some tangible things.
But ad revenue business that you were talking about, I'm thinking almost like on a theoretical basis because we've seen companies like The Trade Desk get absolutely hammered because of walled gardens and the way that the advertising business has shifted, and this would seem to make it a lot worse. But there is going to be an opportunity for somebody like that, who can discern between a human and a clanker who's bringing your web traffic to your website. If you can deliver ads for the right person, or if there is some way to influence AI agents with not necessarily the advertising that we think of today, but some way to influence the way that AI agents make executive decisions based on what is presented, there is probably some opportunities there as well. Again, this is to me, it's a little theoretical. I haven't really seen the effective business plan that executes this well, but why I'm struggling with this and why I'm saying I need to see more of what's out in the market available.
Jon Quast: Well, Tyler, I'll go ahead and forgive you because I think that humility is one of the most important traits an investor can have in saying, I don't know yet is intellectually honest, so I'll allow it.
Tyler Crowe: I said that on CNBC once, like 12 years ago, and I haven't been invited back since, so I'm pretty sure you're not supposed to do it.
Jon Quast: We'll invite you back on this podcast, but that's it for this segment. After the break, we're going to dig in to some mining stocks. You're listening to Motley Fool Hidden Gems Investing.
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Jon Quast: Welcome back to Motley Fool Hidden Gems Investing. The Trump administration over the weekend, making some big announcements regarding mining, and there are some mining stocks that are up today. I want to talk about this for a moment. There is, of course, the geopolitical angle here. The USA gets a lot of its minerals from China. Of course, it would like to be less reliant on that. One of the things that appears to be holding our country back is the workforce. According to some reports, China graduates over 3,000 mining engineers annually, and compared to the U.S., the USA is far fewer, at only about fewer than 170 annually. One of the interesting things here is that it's projected that perhaps half of the educated mining workforce is going to be retiring within the next three years. Labor seems to be an issue, the Trump administration committing $100 million to education. I want to get y'all's reactions here to that.
Matt Frankel: We're going to switch roles. I feel like I'm going to be the curmudgeon in this section. The problem here isn't tuition. It's that mining is a highly cyclical industry. Jobs can be in very remote areas where nobody in the U.S. lives. There have been stretches where it was impossible for new grads to find a job in the industry. I want to say the whole 2015 to 2020 era was really difficult for the mining industry. This is why there were about 1,500 people enrolled in mining engineering programs in 2015, and now there are fewer than 600. It's not that interest in high-paying jobs has evaporated. It's the industry showed people that this is not as stable as you might think.
Plus, when you say that half of mining engineers are set to retire within three years, it takes four years, at least — let's be realistic. Most people take closer to five to get through college these days. It takes four years to get a mining degree. I'm not sure the timing really works as much as the Trump administration wants to say here. I understand the national security angle. Same thing we've gone through with the chipmakers, but I'm not sure this will do enough to attract thousands of new students. Tyler, bring us home some optimism here.
Tyler Crowe: Someone who spent eight years in college, that five years is a nice term. All I'll say is on the remote stuff, too, though, I've spent the last seven years outside the United States for my wife's work, and I'll say that working remote places certainly has its perks. I can't be said that I'm not a wife guy, 'cause I'm definitely thanking her for doing that. Also, I'm being a little tongue-in-cheek here, but the threat of AI jobs apocalypse certainly helps making the case for this work. Be a professional that might get your job eaten by AI, or I don't know, go work in Alaska for a little while. See if this has a tangible impact on employment and mining activity in the United States. I'm a little dubious.
Mining is like the AI in the sense that no one wants to live next to a data center or tungsten mine. Let me give one example. I grew up in New Hampshire, neighboring the state of Maine. Maine has one of the largest lithium deposits in North America, but state laws make it effectively impossible to build a mine to actually extract it. Whether that changes, we don't know. It could, but I have my doubts because there's a lot of NIMBY that's involved with mining as well. There is a lot of things that need to happen for an American mining renaissance that doesn't seem to be in what these deals that we've been seeing happening. It's going to take a lot more than money and some new engineers.
Jon Quast: This isn't a topic I don't think I would normally highlight here for the podcast, but we did have Tyler subbing in today, and Tyler, of course, is our resident expert when it comes to mining. I think that's important because I don't think many of us really understand the business of mining, the economics of mining. I think a lot of us, such as myself, to see a $3 billion investment from the U.S. government and say, that must be bullish for the mining stocks. But Tyler, I want you to temper us a little bit. Explain to us what we should be thinking.
Tyler Crowe: Sure. I'm going to again put on my cranky pants. Look, part of the announcement that we saw there was this $3 billion investment from the government- some to education, some stuff. $1.4 billion of it is going to a start-up that actually isn't in mining. Of that $1.4 billion is a Department of Energy loan for a start-up lithium-ion battery company. It's not public, and it makes silicon anodes for batteries. Now, if you squint really hard, you might be able to make the case for increased mining, but that's for quartz and silica, which isn't exactly what we're talking about here with rare-earth minerals and these super hard-to-extract things. Silicon and quartz are relatively easy.
My word of caution: I sat on the editor desk of Energy Materials for fool.com for a while. The one thing I guarantee we will see from this is a bunch of hopes and prayers mining companies go public. They will claim to have the largest reserve of XYZ mineral, and their investor desks will be stuffed with projected material demand and cost curves and all the stuff to get investors excited, but there won't be little in terms of what they will do as a business in profitability. More often than not, they are siren songs, and the chances of finding that one that actually becomes a revenue-generating, profit-generating entity is the same odds as a lottery ticket, and honestly, the returns on those aren't as good as lottery tickets. I think, honestly, better to strap yourself to the mast and sail past as best as you can.
If it does end up making it as a viable mining company, it will hit some low in the mining cycle because it's a cyclical industry, and maybe then it'll be a worthwhile investment. But investing in a bunch of start-up mining companies that are on hopes and prayers, I think you have better ways to spend the money.
Jon Quast: I will definitely take advice from somebody who has spent a lot of time thinking about this, whereas I have not. Coming up after the break, Intel is raising some cash. You're listening to Motley Fool Hidden Gems Investing.
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Jon Quast: Welcome back to Motley Fool Hidden Gems Investing. We do want to make you a part of the conversation. If you have a stock or an investing topic that you would like to ask any of our analysts and panel members on any single episode of this show, feel free to email us at [email protected]. We ask that you keep your questions somewhat short so we can read them on air, keep them Foolish. Remember, we can't give personalized investing advice more general. But if you want to bring in a question, email that to us at [email protected]. Actually, our mailbag was a little thin today. We're skipping over that, going with a third topic here.
We saw today that Intel announcing it is going to be raising some cash. The stock is down a little bit today on this news, but it is going to be selling some equity to raise $15 billion. The jargon in the announcement says capex, general working capital. But there is a why-now section in which Intel said progress in emerging areas, including physical AI. This would be like robots or something that is using AI in the physical world. Physical AI purpose built silicone, so their own custom stuff. Advanced packaging and external wafers represent significant growth opportunities for Intel. Matt, is this a move that you like from Intel raising cash?
Matt Frankel: Short answer is that I am a big fan of this move, and I'm generally a fan of issuing equity for most companies when a stock is expensive. Throughout its history, Tesla has done this arguably better than anyone. I've said many times that their valuation is one of their biggest assets, the ability to raise a lot of capital without a lot of dilution. There are some companies that literally survived the last bear market, specifically because they raised capital when their stocks got bubbly in 2021. Think of Lemonade as one company that I follow. They did a really smart capital raise right around the peak, and it's why they have $1 billion on their balance sheet today.
In Intel's case, specifically, that $15 billion raise sounds like a lot of money, and it is. I would love to have $15 billion, but it represents less than 3% dilution at the current market value of the company. It prevents them from taking on additional debt to capture some of those opportunities. Speaking of those opportunities, you mentioned they specifically cited progress in several areas; especially in my mind, external wafers is the biggest one there. That implies that the third-party foundry business is coming along quicker than even they thought. That's been a major part of the investment thesis. Intel's growth over the past year, in terms of revenue, doesn't justify its 5x stock price. It's that third-party foundry business, and that's really what seems to be wrapping up here that they need money.
Jon Quast: It's the inverse situation of watching a CFO buy back shares at ridiculously high valuations. Behavior like that makes me want to gather up a posse with torches and pit for its. Look, if you're going to dilute shareholders, which is never really objectively a good thing, but if you're going to do it, might as well do it from a position of strength. Then wait until you're desperate for cash. Intel's stock is up 395% in the past year. It's raised its capex plan to $20 billion for this year alone. For 2027, they're saying it's going to be significantly higher. This was on its conference call a couple of days ago. That is way more than what it's bringing in operating cash right now. Better to do it now than wait and potentially have the market turn on you and have to issue more shares for the same effect.
Tyler Crowe: Intel's valuation certainly plays a part here. I was looking at the 10-year average for its price-to-sales valuation, and it's traded at an average of three times as sales over the last 10 years. Right now, trading at eight times at sales, and so that's more than double what its long-term average is. That's after it's already come down some. Definitely a higher valuation than what we're used to, definitely selling some equity at those higher levels to fund its capital expenditures that it has planned. But one of the interesting things here that I thought of when I saw this was that actually the S&P 500, the dividend yield for it right now, according to some reports, hitting an all-time low of 1.04%. In dividend yield, if it's low, that's indicating a high stock price or a high valuation for the stock price. It's not perfectly that way, but it does suggest that. I'm wondering if the S&P 500 there is one indication here saying, we're actually very highly valued as a market. Do you think that we're going to see some more dilution, not from Intel, but from other companies if it's generally a very hot market right now?
Matt Frankel: I would argue that we've already seen that. Alphabet recently raised $45 billion in equity. Berkshire Hathaway took 10 billion of that. Overall, US equity raises were 67% higher in the first half of 2026 in the same period last year. That doesn't even include the record-breaking IPO market that we've seen, led by SpaceX, but there have been others. To answer your question a little more directly, yes, I expect more, but not because of opportunistic valuations. It's also a need-based capital-raising time. The rapid buildout of that AI infrastructure it's created a need for many companies to raise billions and billions of dollars. Some will be raised in the form of debt, which we've seen with some of the big tech companies already.
But I do foresee a lot of equity raises. Convertible bond offerings tend to become really popular in times like these, and we've already seen a bunch of those, and I see a lot of this thing in the second half. Nothing sounds worse to me than a convertible bond offering. That sense never ends up working out well for anybody. Like you said, it's not Alphabet, and it's not equity. We're seeing debt, we're seeing equity, we're seeing a bunch of off-balance-sheet financing, a lot of like these. We guarantee the lease things that entities and tenants are starting to do. It's hard to see a path where companies don't have to go to the financial market repeatedly over the next several years if they stick to their current spending plans. Everyone's talking about more, more, more, more; their current cash flows aren't supporting it, and it's hard to see how they're going to do it even with future growth in operating cash flow. Their spending plans are almost inevitably going to outpace it based on what they're saying.
I think the only reason that that would change is if the market cries Oracle in some way or other. I'll give you an example: Oracle's credit rating was downgraded from the lowest investment credit grade rating you can get. Now, does its spending plans change if it does finally get downgraded to junk status? Probably. Because that's when we start to look at cost of capital getting much, much higher. That's when you have to start thinking twice because then all of a sudden, these theoretical ROIs really have to start making more sense. As long as we see the current trajectory, as long as valuations are high and everyone's hunky dory about all this, we're going to see it for a while. But if we see some altering event like a credit downgrade or something like that, that is going to make somebody blink, and that's when we're going to see an alteration in its spending plans.
Jon Quast: We're definitely going to keep an eye on somebody blinking, and when they do, we'll bring that to this podcast. That's all the time that we have for today.
As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Pool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. See our full advertising disclosure; please check out our show notes. Thanks to our producer, Kristi Waterworth, and the rest of The Motley Fool team. For Matt, Tyler, and myself, thank you so much for listening to our show today, and we will see you again next time.
NET Power NYSE: NPWR said it is redirecting its near-term development strategy toward unabated, behind-the-meter natural gas generation as prospective customers prioritize rapid access to reliable power for data centers and other large loads.
Chief Executive Officer Danny Rice said the company spent the past four months engaging with prospective power buyers, including hyperscalers, data-center developers and industrial companies. The consistent message, he said, was that customers need “speed, scale, and reliability” and are willing to pay a fair price for those attributes amid constraints on power supply and grid interconnections.
NET Power will retain carbon capture as a future option but does not expect to install post-combustion capture during the initial phase of its Project Permian development in West Texas. Rice characterized the shift as a change in sequencing rather than a departure from the company’s longer-term clean-power ambitions.
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Project Permian Redesign Focuses on Co-Located Load
Project Permian is being redesigned to serve co-located customer demand, with the ability to add carbon capture in later phases if customer requirements, economics and financing support it. Rice said the site could support roughly 1 gigawatt to 1.5 gigawatts of generation across multiple phases, while the initial phase will be sized according to current customer contracting demand.
The company said it intends to pursue off-grid or behind-the-meter generation that does not rely on the broader power grid or an interconnection queue. Rice said grid constraints have become increasingly prominent not only in PJM and MISO, but also in ERCOT, where he said interconnection queues are extending into the 2030s.
Rice said the company believes the West Texas location offers advantages for both near-term gas generation and a potential future carbon-capture retrofit. The project remains near high-voltage transmission lines that could enable a future grid connection, he said. NET Power also continues to work with Occidental Petroleum, or Oxy, on land rights and retains a potential future pathway to sell captured carbon dioxide for enhanced oil recovery.
“We build the power first,” Rice said, “and we capture when it makes sense.”
Reliability Design Combines Multiple Generation Technologies
President and Chief Operating Officer Marc Horstman said NET Power is targeting “three nines” reliability, or 99.9% uptime, for its behind-the-meter projects. The company’s contemplated configuration includes battery energy storage, reciprocating engines and gas turbines, designed with redundancy so that maintenance or an outage at one unit would not interrupt customer supply.
Horstman said the company’s modeling indicates that a single large generation unit would not meet a 99.9% uptime target because planned maintenance by itself could exceed the allowable outage window. A portfolio of smaller units, he said, can provide the necessary redundancy.
NET Power is working with a potential customer to secure an additional 120 megawatts of gas-power equipment with early delivery. Combined with gas turbines it has already secured, the company said this could bring secured capacity for the first phase of the larger project to nearly 200 megawatts.
Rice said the company is technology-agnostic in evaluating the eventual project configuration and will seek the combination of turbines, reciprocating engines and battery storage that can deliver the lowest-cost reliability on the customer’s required timeline.
Carbon Capture Option and Entropy Relationship Remain
While the initial Project Permian deployment is not expected to include carbon capture, NET Power said it is discussing a revised framework with Entropy under which Entropy’s post-combustion carbon-capture technology could be deployed in later stages of NET Power projects.
Rice said the company does not want customers to pay for clean power before they request it, but intends to retain the engineering capabilities and project locations needed to decarbonize its facilities later. He said the company sees carbon capture as a longer-term differentiator once power supply and demand become more balanced.
Horstman said post-combustion capture needs to be integrated into project planning, but it can be added after an initial power build. He said the company’s work with Entropy over the past several months has helped it understand how to design facility layouts that preserve a “legitimate path forward” for future clean-energy deployment.
Funding and Commercial Process
Chief Financial Officer Lee Shuman said NET Power ended the second quarter with approximately $310 million of cash equivalents and investments and no debt. The company said its current cash resources are sufficient for ongoing operations, Project Permian development activities and portions of the project equipment.
However, financing construction through commercial operations will require project-level financing, partner capital, additional equity, or a combination of those sources, Shuman said.
Rice said the company is seeking to limit speculative equipment commitments and is working to align prospective customers before making further major capital commitments. He said NET Power expects to take a “thoughtful” and “pragmatic” approach to securing equipment and financing while continuing discussions with potential offtakers and partners.
The company did not provide a specific timetable for an offtake agreement, though Rice said NET Power hopes to have more to share in the coming months. He said the company expects grid and power constraints to persist at least into the early 2030s in faster-moving markets, with a more conservative scenario extending constraints to the middle of the next decade.
About NET Power (NYSE:NPWR)NET Power, Inc is an energy technology company focused on developing and commercializing power generation plants that burn natural gas and other fuels with near-zero carbon emissions. The company's core innovation is the proprietary Allam-Fetvedt Cycle, a supercritical carbon dioxide power cycle that captures all carbon dioxide produced during combustion without the need for separate carbon capture systems. By integrating gas combustion, heat exchange and carbon dioxide separation into a single closed-loop process, NET Power aims to deliver baseload power with efficiencies and emissions profiles competitive with conventional and renewable generation sources.
Since demonstrating its first full-scale Allam-Cycle facility in La Porte, Texas, NET Power has moved from pilot operation toward commercial deployment.
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The AI wave will soon hit public markets with Anthropic and OpenAI set to go public later this year. However, you don't have to wait to invest. This report shows seven AI stocks that you can buy today while the big model providers get ready to go public.
SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, announced today that it is serving as an independent Key Transparency auditor for Signal, the private messaging app trusted by hundreds of millions of people worldwide. With this partnership, Cloudflare is giving Signal users extra confidence that their conversations are private and secure, without requiring complicated manual verification steps. End-to-end encryption keeps messages private by.
EBITDA totaled R$ 1.2 billion in 2Q26, with an EBITDA margin of 8.7%. Over the last 12 months, EBITDA totaled R$ 4.9 billion, up 22.1%, with an EBITDA margin of 8.6%
, /PRNewswire/ -- Minerva S.A. (BM&FBOVESPA: BEEF3 | OTC - Nasdaq International: MRVSY), a South American leader in the export of fresh beef and beef products, with additional operations in the processed foods segment, reports its earnings for the second quarter of 2026. The financial and operational information presented herein is stated in Brazilian Reais (R$) and prepared in accordance with BRGAAP and International Financial Reporting Standards (IFRS).
In 2Q26, Minerva Foods' net revenue totaled R$ 14.1 billion, up 1.3% year over year and 5.2% compared with 1Q26. Over the last 12 months ended June 2026 (LTM 2Q26), consolidated net revenue totaled R$ 57.2 billion, an increase of 29.1% compared with LTM 2Q25.
Consolidated gross revenue totaled R$ 15.1 billion in 2Q26, with exports accounting for 57% of the total. Over the last 12 months ended June 2026 (LTM 2Q26), total gross revenue reached R$ 609 billion.
EBITDA totaled R$ 1.2 billion in 2Q26, with an EBITDA margin of 8.7%. Compared with 1Q26, EBITDA increased by 10%, reflecting Minerva Foods' operational resilience and its ability to capitalize on commercial opportunities through its diversified platform.
Net income totaled R$ 196.9 million in 2Q26, more than doubling from R$ 87.3 million in 1Q26. In 1H26, net income totaled approximately R$ 284.2 million, while over the last 12 months it reached R$ 489.2 million.
At the end of June 2026, net leverage, measured as Net Debt/LTM Adjusted EBITDA, stood at 2.9x, down from 3.2x in 2Q25. The year-over-year variation of 0.3x reflects the continued strengthening of the Company's capital structure and its commitment to financial discipline.
Against a global backdrop of consistent demand for animal protein and differing trade and production dynamics across markets, Minerva Foods' scale and geographic diversification continue to provide the flexibility to combine origins, destinations, and opportunities for greater competitiveness.
South America continues to strengthen its role in global food security, supported by its production competitiveness and export capacity. In this context, Minerva Foods remains well positioned to meet demand across key consumer markets and to translate its operational scale into greater efficiency, value creation, and returns on capital.
Bond Issuance
In 1H26, the Company repurchased approximately US$ 66.9 million of its 2031 Bond. Combined with the redemption of the 2028 Bond, totaling US$ 166.0 million, these transactions brought year-to-date repurchases to US$ 232.9 million, equivalent to R$ 1.2 billion. Since the beginning of 2025, the Company has repurchased approximately US$ 617.7 million, or R$ 3.4 billion, of bonds issued in the international market. In addition, the Company repurchased approximately R$ 66.2 million of debt securities in the local market.
The Company remains focused on opportunities to manage its financial liabilities, seeking a less costly and more efficient capital structure. The recent issuance of US$ 600 million in 2036 Bonds—which was 2.5 times oversubscribed —along with other initiatives in the local capital markets, reinforces this strategy and contributes to extending the Company's debt maturity profile.
About Minerva Foods
Minerva Foods is a global food company and the leading exporter of beef in South America. The company owns internationally recognized brands such as Cabaña Las Lilas, Estância 92 and PUL and serves customers in more than 100 countries.
Minerva Foods is part of Minerva S.A., which also includes Minerva Energy, Minerva Biodiesel, Minerva Ingredients, Minerva Casings, Minerva Leather and MyCarbon.
With operations in Brazil, Paraguay, Argentina, Uruguay, Colombia, Chile and Australia, the group employs more than 35,000 people and operates 46 industrial facilities, 18 international offices and 23 distribution centers, supplying beef, lamb and processed products to customers across five continents.
Key Takeaways Cloudflare is gaining SASE and Zero Trust demand as companies seek to secure AI agents.Cloudflare won a $5.2 million SASE deal by offering network performance and unified management.Cloudflare's market-share gains depend on converting AI security needs into larger enterprise contracts. Cloudflare (NET - Free Report) is seeing stronger demand for its Secure Access Service Edge (SASE) and Zero Trust offerings as companies look to adopt artificial intelligence (AI) more securely. Management said the key reason big companies are approaching Cloudflare is that they know they need AI but want to deploy it securely. This is creating new opportunities for the company’s SASE and Zero Trust platforms, particularly as enterprises need to secure AI agents in addition to human users, which could help the company expand market share, win larger enterprise deals and compete with established players like Palo Alto Networks (PANW - Free Report) and Zscaler (ZS - Free Report) in the SASE and Zero Trust markets.
Cloudflare believes its developer-focused approach gives it an advantage in this market, as the companies will have more AI agents working across their organizations and will need a security model designed for these agents. In one example, a large U.K. government agency was evaluating a first-generation Zero Trust provider but reconsidered the project after discussing its plans for AI agents with Cloudflare. Here, the agency canceled its existing request for proposal and is now reevaluating the project with an agents-first approach. Management said that its developer-focused approach has helped its SASE and Zero Trust platforms gain significant share over the past six months.
Customer wins in the second quarter of 2026 also show demand for Cloudflare’s security platform. A Fortune 100 technology company signed a $5.2 million, three-year contract for Cloudflare’s full SASE portfolio. The customer is replacing legacy VPNs and virtual desktops and moving its global workforce to a single Zero Trust platform. Cloudflare beat two first-generation Zero Trust vendors in the deal because of its network performance and unified management, with the customer expecting to operate the services with roughly one-third the staff.
The broader shift toward AI could therefore support Cloudflare’s SASE and Zero Trust growth. The company is also seeing enterprises replace fragmented security tools with its unified platform. Sustaining its recent market-share gains will depend on how well Cloudflare can convert growing AI security needs into larger and longer-term enterprise contracts. The Zacks Consensus Estimate for Cloudflare’s 2026 and 2027 revenues indicates year-over-year growth of 31.1% and 28.2%, respectively.
Cloudflare Faces Tough CompetitionPalo Alto Networks’ wide range of innovative products, strong customer base and growing opportunities in areas like Zero Trust and SASE continue to support its long-term growth potential. In the third quarter of fiscal 2026, SASE was Palo Alto Networks’ fastest-growing segment, with SASE Annual recurring revenues (ARR) increasing 40% year over year. PANW's SASE business is benefiting from strong customer demand for cloud-delivered networking and security solutions as enterprises continue to support hybrid work environments and secure access to cloud applications.
Zscaler is seeing strong adoption of its Zero Trust Everywhere strategy, which is helping the company expand beyond its traditional user security offerings. The strategy combines security for users, cloud workloads and branch locations on a single platform. The company ended the third quarter of fiscal 2026 with more than 700 Zero Trust Everywhere enterprises, up from more than 550 in the previous quarter. As more customers adopt multiple products across the platform, Zero Trust Everywhere could help Zscaler increase customer spending, win larger deals and support long-term growth.
NET’s Price Performance, Valuation & EstimatesShares of Cloudflare have jumped 55.7% in the year-to-date period against the Zacks Internet – Software industry’s decline of 1.8%.
NET YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, NET trades at a forward price-to-sales ratio of 32.57, significantly higher than the industry’s average of 4.09. The Zacks Value Score of F also suggests that NET stock is overvalued.
NET Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NET’s 2026 earnings is pegged at $1.21 per share, revised downward by a penny over the past 30 days, indicating a 30.11% increase from the previous year.
Image Source: Zacks Investment Research
Cloudflare currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
After her legendary returns in 2020 and bouncing back to trounce the market again in 2025, Cathie Wood is hoping that it doesn't take another four years before her next victory lap. The founder, CEO, and chief investment officer at Ark Invest has been heating her firm's transaction activity this summer.
Wood kicked off the new trading week by buying shares in Nvidia (NVDA +0.02%), Broadcom (AVGO -1.06%), and Cloudflare (NET -0.12%) on Monday. Ark Invest is adding to existing positions in all three cases. Let's take a closer look at what she may find so appealing right now in these three investments.
Image source: Getty Images.
1. Nvidia Wood didn't just buy a little more Nvidia on Monday. Ark Invest added additional shares to five of its six ETFs. The world's most valuable company by market cap is trading just 8% below its May all-time high, even after its 3% slide to kick off the new trading week. However, Nvidia stock's 19% gain over the past year is modest compared with the gains of other AI accelerator, memory, and other component plays riding its coattails.
Nvidia's return over the past year even lags the market's 21% jump. Making Nvidia's potential here even more tantalizing, the stock's a lot cheaper now than it was a year ago. Revenue and adjusted earnings soared 85% and 139%, respectively, in its latest quarter.
Today's Change
(
0.02
%) $
0.04
Current Price
$
217.59
Revenue has accelerated sharply over each of the last three quarters, and analysts expect a repeat performance when it steps up again with its latest financial update later this month. Wall Street pros are modeling a 96% increase in Nvidia's fiscal second-quarter top line, with adjusted net income growing even faster.
Picking up the leading provider of AI and data center chips for less than 17 times next fiscal year's profit target seems too cheap to ignore. This could be why Wood has been actively building up her Nvidia position this summer, as smaller players that are growing more slowly and packing higher valuations are rallying.
The AI backlash is swelling these days. Most people don't want a new resource-slurping data center built in their neighborhood. Leading content sites are cracking down on "AI slop," and reports of AI-propelled hacking are scary. Even Nvidia's latest move -- teaming up with a half-dozen financial giants to offer $500 billion in customer financing -- has been met with a chorus of jeers rather than cheers.
All that said, you still don't want to be against AI in the long run and Nvidia in the short run.
Today's Change
(
-1.06
%) $
-4.48
Current Price
$
417.93
2. Broadcom Broadcom stock also declined on Monday, retreating 15% since peaking two months ago. Most of the semiconductor and tech infrastructure solutions specialists fell on the day after posting their all-time highs in early June. A poorly received financial update is to blame, despite what was technically a "beat-and-raise" performance.
Like Nvidia, Broadcom's growth is accelerating. The 49% increase in revenue it posted in its fiscal first quarter was its fourth consecutive period of widening top-line growth. Its outlook calls for an 84% leap in revenue for the fiscal second quarter, when it reports on Sept. 2. And the company's thriving AI semiconductor business continues to make up a larger share of the revenue mix.
The disparity is even more pronounced on the bottom line. Broadcom is trading for more than 60 times last fiscal year's earnings but barely 20 times Wall Street's profit target for the next fiscal year.
Today's Change
(
-0.12
%) $
-0.36
Current Price
$
310.23
3. Cloudflare Cybersecurity stocks have been whipsawed in recent months. The one niche of the enterprise software space that seemed like a core recession-proof industry a year ago came under fire earlier this year as some speculated on the threats posed by cheaper AI alternatives.
Cloudflare and some of its rivals have been storming back lately. This was the only one of the three stocks listed here to close higher on Monday, following the all-time high it notched last Friday. The 36% revenue growth that it produced in its latest quarter is its strongest top-line increase in more than three years. It's not as cheap as Nvidia or Broadcom on an earnings basis, but Cloudflare's momentum is clearly back as customers brace for rising cybersecurity threats.
Key Takeaways Cloudflare is benefiting from rising AI security demand across SASE and Zero Trust offerings.Large customers drove growth, with 120% dollar-based net retention and revenues up 36% year over year.Cloudflare's premium valuation reflects strong investor confidence in AI security and customer growth. Cloudflare Inc. (NET - Free Report) shares have surged 65.4% in the past three months, outperforming the Zacks Internet - Software industry’s appreciation of 13.3%. The stock also outperformed its industry peers, including F5 Networks, Inc. (FFIV - Free Report) , BlackBerry Limited (BB - Free Report) and Allot Ltd. (ALLT - Free Report) . In the past three months, shares of F5 Networks and BlackBerry have gained 16.5% and 42.5%, respectively, while Allot shares have plunged 9.7%.
The outperformance of Cloudflare’s shares raises the question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.
3 Month Price Return Performance
Image Source: Zacks Investment Research
AI Security Demand Bodes Well for Cloudflare's ProspectsCloudflare is seeing stronger demand for its SASE and Zero Trust offerings as companies look to adopt artificial intelligence (AI) more securely. Management said the key reason big companies are approaching Cloudflare is that they know they need AI but want to deploy it securely. This is creating new opportunities for the company’s SASE and Zero Trust platforms, particularly as enterprises need to secure AI agents in addition to human users.
Cloudflare believes its developer-focused approach gives it an advantage in this market. Management said companies will have more AI agents working across their organizations and will need a security model designed for these agents. In one example, a large U.K. government agency was evaluating a first-generation Zero Trust provider but reconsidered the project after discussing its plans for AI agents with Cloudflare. Management said the agency canceled its existing request for proposal and is now reevaluating the project with an agents-first approach. Cloudflare believes its developer-focused approach has helped its SASE and Zero Trust platforms gain significant share over the past six months.
Customer wins in the quarter also show demand for Cloudflare’s security platform. A Fortune 100 technology company signed a $5.2 million, three-year contract for Cloudflare’s full SASE portfolio. The customer is replacing legacy VPNs and virtual desktops and moving its global workforce to a single Zero Trust platform. Cloudflare beat two first-generation Zero Trust vendors in the deal because of its network performance and unified management, with the customer expecting to operate the services with roughly one-third the staff.
The broader shift toward AI could therefore support Cloudflare’s SASE and Zero Trust growth. The company is also seeing enterprises replace fragmented security tools with its unified platform. Sustaining its recent market-share gains will depend on how well Cloudflare can convert growing AI security needs into larger and longer-term enterprise contracts. The Zacks Consensus Estimate for Cloudflare’s 2026 and 2027 revenues indicates year-over-year growth of 31.1% and 28.2%, respectively.
Image Source: Zacks Investment Research
Large-Customer Growth Boosts Cloudflare's ProspectsCloudflare is seeing strong momentum among its largest customers, which is driving strong revenue growth and customer retention. In the second quarter of 2026, the company ended with 4,698 customers generating more than $100,000 in annual revenues, up 27% year over year. Cloudflare added 282 large customers during the second quarter and a record 986 net additions in large customers, year over year. Each large-customer group, from $100,000 to more than $5 million in annual revenues, posted record year-over-year net additions in the second quarter of 2026.
Large customers are also becoming a bigger part of Cloudflare’s business. They accounted for 73% of total revenues in the second quarter, up from 71% a year ago. Strong expansion among these customers helped push dollar-based net retention to 120%, up from 118% in the previous quarter and 114% a year ago. This shows that existing customers are increasing their spending on Cloudflare’s products, while the company continues to add new large accounts.
The strong performance of large customers is supporting Cloudflare’s overall financial growth. Second-quarter revenues increased 36% year over year to $696.1 million. Management said new customer bookings grew at their fastest rate in more than five years, while pipeline generation increased at its fastest sequential pace in five years. Cloudflare added more than 80,000 paying customers during the second quarter, resulting in 74% year-over-year growth in its paying customer base.
The above-mentioned factors show that Cloudflare’s growing large-customer base could support future revenue growth if these customers continue to expand their use of Cloudflare's platform. The company is also seeing customers adopt multiple products, including its developer platform, Zero Trust and application security offerings. As of now, maintaining 120% net retention will depend on continued expansion among existing customers.
Long-Term Prospects Justify NET’s Premium ValuationCloudflare is currently trading at a higher price-to-sales (P/S) multiple compared with the industry. NET’s forward 12-month P/S ratio sits at 32.97X, higher than the industry’s forward 12-month P/S ratio of 4.06X.
NET Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
NET stock also trades at a higher P/S multiple compared with other industry peers, including F5 Networks, BlackBerry and Allot. At present, F5 Networks, BlackBerry and Allot have P/S multiples of 6.46X, 8.09X and 2.92X, respectively.
NET’s rally reflects strong investor confidence in AI security demand and large-customer growth, putting it above industry and peers in terms of valuation, reflecting the high growth expectations of the company in the long term.
Key Technical Indicator Signals Bullish Trend for NETCloudflare shares are trading above their 50-day and 200-day moving averages, a bullish technical signal that indicates the potential for continued upward momentum in the near term.
NET 50-Day & 200-Day Simple Moving Averages
Image Source: Zacks Investment Research
Conclusion: Buy Cloudflare Stock Right NowCloudflare’s strong growth in AI security, SASE and Zero Trust, along with rising demand from large customers, supports its long-term growth outlook. The company’s strong revenue growth estimates and improving customer spending support the outlook for continued growth. Further, the stock’s valuation reflects high growth expectations, as Cloudflare remains well positioned to benefit from rising AI security demand over the long term.
Currently, Cloudflare carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cloudflare, Inc. (âCloudflareâ) (NYSE: NET) today announced the pricing of $2.175 billion aggregate principal amount of 0% convertible senior notes due 2031
SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (“Cloudflare”) (NYSE: NET) today announced the pricing of $2.175 billion aggregate principal amount of 0% convertible senior notes due 2031 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Cloudflare also granted the initial purchasers of the notes an option to purchase, for.
, /PRNewswire/ -- Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX: SVM) (NYSE American: SVM) reported its financial and operating results for the three months ("Q1 Fiscal 2027") ended June 30, 2026. All amounts are expressed in US dollars, and figures may not add due to rounding.
HIGHLIGHTS FOR Q1 FISCAL 2027
Production results: Produced approximately 1.5 million ounces of silver, 2,536 ounces of gold, or approximately 1.7 million ounces of silver equivalent1 during the quarter; Strong quarterly revenue: Sold approximately 1.5 million ounces of silver, 2,454 ounces of gold, 13.7 million pounds of lead, and 4.2 million pounds of zinc, for revenue of $138.7 million, an increase of 70% over the three months ended June 30, 2025 ("Q1 Fiscal 2026"), mainly driven by a 135% higher average realized silver price of $69.38 per ounce, with silver representing 77% of the quarterly revenue; Cash cost per ounce of silver1 (net of by-product credits): $1.33, compared to $1.11 in Q1 Fiscal 2026; All-in sustaining cost per ounce of silver1 (net of by-product credits): $18.38, 36% higher than $13.49 in Q1 Fiscal 2026, mainly due to 72% higher government taxes linked to increased revenue and less metals produced and sold; Adjusted earnings before interest, income tax, depreciation and amortization ("EBITDA")1 attributable to equity shareholders of $77.3 million, or $0.35 per share, compared to $35.0 million or $0.16 per share in Q1 Fiscal 2026; Net income attributable to equity shareholders of $59.4 million, or $0.27 per share; Adjusted earnings1 attributable to equity shareholders of $53.9 million, or $0.24 per share, after excluding the non-cash or one-time items, compared to $21.0 million or $0.10 per share in Q1 Fiscal 2026; Robust cash flow from operating activities of $61.7 million, up $13.4 million, compared to $48.3 million in Q1 Fiscal 2026; Mine Development & Construction: spent and capitalized $22.3 million on exploration, development, and equipment and facilities at the China operations; $12.9 million at the Ecuador operations mainly for the development and construction of the El Domo mine; and $2.6 million for Chaarat ZAAV mine construction; Solid free cash flow1 generated of $28.6 million, up $6.1 million, compared to $22.5 million in Q1 Fiscal 2026; Strong treasury position: ended the period with cash and cash equivalents and short-term investments of $387.1 million, a decrease of $35.2 million from March 31, 2026 after $37.7 million capital expenditures on development and construction, and $60.0 million payment to close the acquisition of Chaarat ZAAV. In addition, the portfolio of equity investments with a total market value of $303.6 million increased by $29.0 million from March 31, 2026; and Proactive Safety Compliance: Starting mid June, we voluntarily suspended operations in China to conduct comprehensive self-reviews and complete the "Six Major Safety Systems" underground upgrades in full compliance with new Chinese government regulations. ______________________________
1 Non-GAAP measures, please refer to section 12 for reconciliation.
CONSOLIDATED FINANCIAL AND OPERATING RESULTS
Three months ended June 30,
2026
2025
Changes
Financial Results (in thousands of $, except per share)
Revenue
$ 138,665
$ 81,334
70 %
Mine operating earnings
84,753
35,823
137 %
Net Income*
59,375
18,126
228 %
Per share - basic
0.27
0.08
223 %
Per share - Diluted
0.24
0.08
195 %
Adjusted earnings*
53,926
21,048
156 %
Per share - basic
0.24
0.10
153 %
Per share - Diluted
0.21
0.10
121 %
EBITDA*
84,473
33,770
150 %
Per share
0.38
0.15
147 %
Adjusted EBITDA*
77,283
34,978
121 %
Per share
0.35
0.16
118 %
Cash flow from operating activities
61,682
48,281
28 %
Sustaining capital expenditures
10,677
10,837
(1) %
Growth capital expenditures
19,866
14,930
33 %
Free cash flow
28,604
22,515
27 %
Basic weighted average shares outstanding
221,138,685
217,991,115
1 %
Metals sold
Silver (million ounces)
1.5
1.8
(16) %
Gold (ounces)
2,454
1,951
26 %
Lead (million pounds)
13.7
15.2
(10) %
Zinc (million pounds)
4.2
5.2
(19) %
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($/ounce)
69.38
29.54
135 %
Gold ($/ounce)
3,927
2,876
37 %
Lead ($/pound)
0.99
0.96
3 %
Zinc ($/pound)
1.33
0.96
39 %
Cost Data per ounce of silver, net of by-product credits ($)
Cash cost
1.33
1.11
20 %
All-in sustaining cost
18.38
13.49
36 %
Financial Position (in thousands of $) as at
June 30, 2026
March 31, 2026
Cash and cash equivalents and short-term investments
$ 387,107
$ 422,335
(8) %
Working capital
293,236
319,461
(8) %
*Attributable to equity holders
INDIVIDUAL MINE OPERATING PERFORMANCE
(i) Ying Mining District
The Ying Mining District delivered a stable Q1 Fiscal 2027, with ore mined of 304,466 tonnes, flat with 304,863 tonnes in Q1 Fiscal 2026.
Production was approximately 1.4 million ounces of silver, 2,536 ounces of gold, or approximately 1.6 million ounces of silver equivalent, plus 12.4 million pounds of lead and 1.6 million pounds of zinc, representing a production increase of 24% in gold and decreases of 16% (silver), 17% (silver equivalent), 15% (lead) and 15% (zinc) over Q1 Fiscal 2026. Lower production output was due to lower head grades, as a result of higher dilution associated with shrinkage mining and a production suspension since mid June.
Cash cost per tonne of ore was $87.05 in Q1 Fiscal 2027, up 5% from Q1 Fiscal 2026, mainly due to a 6% appreciation of the RMB against the USD. Cash cost per ounce of silver, net of by-product credits, was $2.45, compared with $1.26 in Q1 Fiscal 2026, mainly due to a decrease of 15% in silver sold which increased the unit cost, coupled with a 6% appreciation of the RMB against the USD, partially offset by an increase of $3.8 million in by-product credits from revenue of non-silver metals.
AISC per tonne was $130.25, relatively flat with $129.83 in Q1 Fiscal 2026. AISC per ounce of silver, net of by-product credits, was $13.94, up 38% from $10.10 in Q1 Fiscal 2026, mainly due to the increase in cash cost per ounce as discussed above, and an increase of 68% in government taxes linked to increased revenue.
Mining Permit Expansion Applications
As of March 31, 2026, the Company has completed the mining permit extension and mining capacity expansion for the four mining permits comprising the Ying Mining District, which are the SGX, TLP-LM, HPG, and DCG mining permits. The total mining capacity allowed by the mining permits is 1.32 million tonnes per year.
Mining permit
SGX
TLP-LM
HPG
DCG
Ying total
Capacity (tonnes)
500,000 p.a.
600,000 p.a.
120,000 p.a.
100,000 p.a.
1,320,000 p.a.
Expiry dates
9/24/2035
26/02/2041
29/04/2028
16/6/2037
Production Safety License Renewal
Following the grants of the new SGX, TLP-LM, HPG, and DCG mining permits, the company is working on the renewal of the production safety licenses: for SGX, the safety facility design has been approved, and it is currently in the construction phase; For TLP, the safety facility design has been reviewed by the emergency management department of Henan Province, with amendments incorporated for final approval; for HPG, the safety facility design has been approved by the emergency management department and construction commenced; and for DCG, the safety facility design has been completed and submitted to the emergency management department for approval.
Proactive Safety Compliance
Starting mid June, we voluntarily suspended the operations at the Ying Mining District to conduct a comprehensive self-review and complete the "Six Major Safety Systems" underground upgrades in full compliance with new Chinese government regulations. The company has engaged 5 vendors to implement the "Six Major Safety Systems" and the project is progressing as a top priority, with a total budget of approximately $11.5 million. Due to these major safety system improvement activities, production is expected to be affected by 40% to 50% in Q2 Fiscal 2027.
Ying Mining District
Three months ended
June 30, 2026
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
Ore processed (tonnes)
Silver-lead ore
290,064
279,627
299,217
235,168
252,958
Gold ore
33,152
32,050
29,208
29,834
30,397
323,216
311,677
328,425
265,002
283,355
Average head grades for silver-lead ore
Silver (grams/tonne)
160
161
190
207
217
Lead (%)
2.1
2.2
2.3
2.6
2.8
Zinc (%)
0.4
0.4
0.4
0.4
0.5
Average head grades for gold-ore
Gold (grams/tonne)
1.2
1.1
1.2
1.4
1.5
Silver (grams/tonne)
48
54
57
81
51
Lead (%)
0.9
0.9
1.1
0.9
0.8
Recovery rates
Silver (%)
94.8
95.0
95.3
94.8
94.6
Gold (%)**
90.5
90.8
92.8
94.2
93.4
Lead (%)
92.4
93.2
93.6
93.5
94.1
Zinc (%)
65.2
63.9
63.0
65.8
64.3
Cash Costs
Cash cost ($/tonne)
87.05
78.27
75.80
82.89
83.08
AISC ($/tonne)
130.25
134.23
134.06
139.22
129.83
Cash cost, net of by-product credits ($/ounce of silver)
2.45
(1.03)
(1.22)
0.97
1.26
AISC, net of by-product credits ($/ounce of silver)
13.94
13.09
11.32
11.75
10.10
Metal Production
Silver (million ounces)
1.4
1.4
1.7
1.5
1.7
Gold (ounces)
2,536
2,492
2,096
2,085
2,050
Silver equivalent (million ounces)
1.6
1.5
1.9
1.7
1.9
Lead (million pounds)
12.4
12.9
14.7
12.9
14.6
Zinc (million pounds)
1.6
1.4
1.9
1.4
1.8
**Gold recovery only refers to the recovery rate for gold ore processed.
(ii) GC Mine
The GC Mine produced approximately 0.1 million ounces of silver, 1.0 million pounds of lead and 2.9 million pounds of zinc, representing decreases of 39% in silver, 12% in lead and 16% in zinc compared to Q1 Fiscal 2026.
Cash cost per tonne was $74.59, up 19% compared to $62.53 in Q1 Fiscal 2026, mainly due to i) higher per tonne fixed costs allocation resulting from a 16% decrease in ore production, ii) a 3% increase in the contractor unit cost upon contract renewal, and a 6% appreciation of the RMB against the USD. The AISC was $115.17, up 15% compared to $99.93 in Q1 Fiscal 2026 mainly due to the increase in cash cost discussed above, partially offset by a decrease of 10% in sustaining capital expenditures.
The cash cost per ounce of silver, net of by-product credits in Q1 Fiscal 2027, was negative $16.90, compared to negative $0.80 in Q1 Fiscal 2026, mainly driven by an increase of $1.5 million in the by-product credits from revenue of non-silver metals. The AISC per ounce of silver, net of by-product credits, was $15.00, down 25% compared to $20.02 in Q1 Fiscal 2026, the decrease mainly due to the decrease in cash cost per ounce of silver and a decrease of 10% in sustaining capital expenditures.
GC Mine Classification Update
The Company has commissioned Changsha Mining Research Institute to prepare the development and utilization plan to change the GC's classification from a lead-zinc mine to a silver mine, which was completed in Q1 Fiscal 2027 and submitted to the Department of Natural Resources of Guangdong Province, and received official approval on August 4, 2026. As the next step following this approval, the Company will proceed with the formal process to change the primary mineral category from lead-zinc to silver.
Proactive Safety Compliance
Starting late June, GC's operations have been temporarily suspended since late June to facilitate the self-review in full compliance with new Chinese government regulations on mine safety nationwide, which has since been completed and was submitted to the Municipal Work Safety Committee for approval on 26 July, 2026, and a third-party government-appointed review is underway. Underground upgrades will proceed upon approval.
GC Mine
Three months ended
June 30, 2026
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
Ore Production (tonne)
63,237
48,840
87,095
76,249
74,869
Head grades
Silver (grams/tonne)
51
52
52
64
69
Lead (%)
0.8
0.9
1.0
0.9
0.8
Zinc (%)
2.3
2.6
2.9
2.8
2.3
Recovery rates
Silver (%)
84.0
86.3
85.9
85.8
85.3
Lead (%)
92.3
93.5
89.1
89.0
90.1
Zinc (%)
90.6
90.6
92.7
91.1
90.0
Cash Costs
Cash cost ($/tonne)
74.59
71.12
53.37
58.20
62.53
AISC ($/tonne)
115.17
109.68
68.53
82.63
99.93
Cash cost, net of by-product credits ($/ounce of silver)
(16.90)
(19.93)
(29.05)
(11.44)
(0.80)
AISC, net of by-product credits ($/ounce of silver)
15.00
10.22
(15.66)
4.71
20.02
Metal Production
Silver (million ounces)
0.1
0.1
0.1
0.1
0.1
Lead (million pounds)
1.0
1.1
1.7
1.3
1.1
Zinc (million pounds)
2.9
2.5
5.1
4.2
3.4
CAPITAL EXPENDITURES AND DEVELOPMENT FOR GROWTH
Total capital expenditures in Q1 Fiscal 2027 were $37.7 million, up 56% compared to $24.2 million in Q1 Fiscal 2026, mainly due to mine construction spending for El Domo, Kuanping and Chaarat ZAAV projects.
China Operations: Capital
Expenditures
Capitalized Expenditures
Ramps and Development
Tunneling
Exploration Tunneling
Exploration Drilling
Plant and
Equipment
Total
(Metres)
($ Thousand)
(Metres)
($ Thousand)
(Metres)
($ Thousand)
($ Thousand)
($ Thousand)
Q1 Fiscal 2027
Ying Mining District
10,235
$ 8,709
17,413
$ 7,085
18,398
$ 642
$ 2,358
$ 18,794
GC Mine
1,192
715
1,336
554
5,119
121
243
1,633
Kuanping
2,155
1,261
1,062
294
3,716
107
172
1,834
Subtotal
13,582
10,685
19,811
7,933
27,233
870
2,773
22,261
Q1 Fiscal 2026
Ying Mining District
12,289
$ 7,804
17,624
$ 6,735
32,889
$ 948
$ 1,217
$ 16,703
GC Mine
401
226
2,326
859
5,731
121
354
1,560
Kuanping
262
300
219
78
—
—
121
498
Subtotal
12,952
8,330
20,169
7,672
38,620
1,069
1,692
18,761
i) Ying Mining District
Capitalized expenditures for underground ramps, tunnels and drilling amounted to $16.4 million, plus $2.4 million for plant and equipment, compared to $15.5 million for underground ramps, tunnels and drilling and $1.2 million for plant and equipment in Q1 Fiscal 2026. Construction of the No. 3 mill commenced, and total capital expenditures incurred in Q1 Fiscal 2027 were approximately $0.3 million, with the foundation treatment and the elevated water tank currently in progress. The No. 1 TSF has reached full capacity, and its closure safety facility design has been approved by the Henan Provincial Department of Emergency Management with an estimated total budget of $2.2 million and contractor tendering currently in progress.
ii) GC Mine
Total capitalized expenditures amounted to $1.6 million, remaining flat with $1.6 million in Q1 Fiscal 2026.
iii) Kuanping Project
In Q1 Fiscal 2027, capital expenditures for Kuanping mine construction totaled $1.8 million, with 3,217 metres or $1.6 million worth of ramps and development tunnels and 3,716 metres or $0.1 million worth of diamond drilling completed and capitalized.
Ecuador Operations: Capital
Expenditures
($ Thousand)
Package #1*
Package #2*
Package #3*
Packages #4&5*
Temporary and
Permanent Camps
Direct costs
sub-total
Owner's Cost
Total
Q1 Fiscal 2027
El Domo
4,486
840
905
2,998
503
9,733
2,547
12,279
Q1 Fiscal 2026
El Domo
2,627
—
—
—
—
2,627
2,149
4,776
*Package #1 - Site preparation/Roads/Channels/TSF/SWD
Package #2 - Open Pit Mining and Stripping
Package #3 - Processing Plant Construction and Equipment
Packages #4&5 - Site Infrastructure (bypass roads, power line, standby diesel generators, water treatment plant)
i) El Domo Project
Capital expenditures for El Domo totaled $12.3 million, compared to $4.8 million in Q1 Fiscal 2026, bringing cumulative project expenditures to $66.2 million. Mine construction advanced steadily despite rainfall challenges. The non-contact water channel, foundation work for the processing plant and the initial dam for the tailings storage facility advanced with a total of approximately 604,600 cubic metres of earthworks excavation and fill completed.
The open-pit pre-stripping commenced, with efficiency improved via equipment additions, expanded operational areas, and road upgrades. Meanwhile, major equipment for the processing plant and water treatment station has been procured and shipped to Ecuador. The contract for the construction of the process plant has been concluded with TGJA, a contractor who has just built the 80,000 tonne per day flotation mill for the Mirador copper-gold mine in Ecuador. The Company is working towards the target of commissioning the operation by July 2027 as planned.
Subsequent to the quarter, the Company received the second installment of $43.9 million under the $175.5 million stream financing agreement, to be applied toward continued support of the mine construction.
ii) Condor Project
The Company increased its ownership of the Condor Project in southern Ecuador from 98.7% to 100% in Q4 Fiscal 2026.
In Q1 Fiscal 2027, total expenditures incurred and capitalized were $0.6 million, primarily on permitting, engineering, and community engagement activities, compared to $0.7 million in the same prior year period.
A PEA study for an underground mining operation was completed in Q3 Fiscal 2026. The PEA underscores significant potential for the project. The water permits have been approved by the relevant government authorities. Technical reports for the environmental license were also completed and submitted to the related government authorities for review. The Environmental Impact Study ("EIS") has been approved by the Ministry of Energy and Mines("MAE"). The Company continued to advance the Free, Prior and Informed Consultation ("FPIC") and Citizen Participation Process ("PPC") required to obtain the small-scale mining environmental license, targeted for Q2 Fiscal 2027. Once this license is secured, the Company will commence the development of underground access tunnels into the Camp and Los Cuyes deposits to facilitate advanced underground exploration and resource definition.
Kyrgyzstan Operations: i) Tulkubash Project
The Tulkubash project advanced rapidly with $0.6 million capital expenditures incurred in Q1 Fiscal 2027. A mining contractor, China Railway 19th Bureau Group Co., Ltd. ("CRCC19"), has been hired after a bidding process that involved five bidders. CRCC19 is currently operating in Kyrgyzstan and is also the mining contractor for our El Domo project in Ecuador. Construction of the temporary camp and related facilities is underway, and CRCC19 has started to build access roads to the open pit mine and waste storage area, and to prepare the site foundation for the heap leach pad area. In addition, a bankable feasibility study is currently under compilation by LogiProc, a third party engineering firm, and is expected to be completed in mid August 2026.
ii) Kyzyltash Project
A 50,000 m drilling program, including both in-fill and step-out, has completed 12,967 m or $1.7 million worth of drilling during the quarter with 16 drill rigs, and the assay results are pending. Geotechnical and hydrogeological studies commenced In Q1 Fiscal 2027, target to be completed in Q3 Fiscal 2027.
CONFERENCE CALL DETAILS
A conference call to discuss these results will be held on Tuesday, August 11, at 9:00 am PDT (12:00 pm EDT). To participate in the conference call, please dial the numbers below.
Participants should dial-in 10 – 15 minutes prior to the start time. A replay of the conference call and transcript will be available on the Company's website at www.silvercorpmetals.com.
Mr. Guoliang Ma, P.Geo., Manager of Exploration and Resources of the Company, is the Qualified Person as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and given consent to the technical information contained in this news release.
About Silvercorp
Silvercorp is a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability and growth potential. The Company's strategy is to create shareholder value by 1) focusing on generating free cash flow from long life mines; 2) organic growth through extensive drilling for discovery; 3) ongoing merger and acquisition efforts to unlock value; and 4) long term commitment to responsible mining and ESG. For more information, please visit our website at www.silvercorpmetals.com.
For further information
Silvercorp Metals Inc.
Lon Shaver
President
Phone: (604) 669-9397
Toll Free 1(888) 224-1881
Email: [email protected]
Website: www.silvercorpmetals.com
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
This news release should be read in conjunction with the Company's Management Discussion & Analysis ("MD&A"), the unaudited consolidated condensed interim financial statements and related notes contains therein for the three months ended June 30, 2026, which have been posted on SEDAR+ under the Company's profile at www.sedarplus.ca and on EDGAR at www.sec.gov, and are also available on the Company's website at www.silvercorpmetals.com under the Investor section. This news release refers to various alternative performance (non-IFRS) measures, such as adjusted earnings and adjusted earnings per share, EBITDA and EBITDA per share, adjusted EBITDA and adjusted EBITDA per share, free cash flow, cash cost and all-in sustaining cost per ounce of silver, net of by-product credits, cash cost and AISC per tonne of ore processed, silver equivalent, and working capital. The tonnage of ore production refers to wet tonne, containing approximately 2% to 3% moisture. These measures are widely used in the mining industry as a benchmark for performance, but do not have standardized meanings under IFRS as an indicator of performance and may differ from methods used by other companies with similar description. The detailed description and reconciliation of these alternative performance (non-GAAP) measures have been incorporated by reference and can be found under section 12 – Alternative Performance (Non-GAAP) Measures in the MD&A for the three months ended June 30, 2026 filled on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov and which is incorporated by reference here in.
This news release includes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable securities laws relating to, among other things statements the accuracy of mineral resource and mineral reserve estimates at the Company's material properties; estimates of the Company's revenues and capital expenditures; estimated production from the Company's mines in the Ying Mining District and the GC Mine; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company's operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company's properties; the amount of ore to be processed during the Chinese New Year holiday; estimated El Domo and Kuanping mine construction progress, and timing of development ore from the Kuanping project to be available for processing. By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking information may in some cases be identified by words such as "will", "anticipates", "expects", "intends" and similar expressions suggesting future events or future performance.
We caution that all forward-looking information is inherently subject to change and uncertainty and that actual results may differ materially from those expressed or implied by the forward-looking information. A number of risks, uncertainties and other factors, including fluctuating commodity prices; recent market events and condition; estimation of mineral resources, mineral reserves and mineralization and metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; climate change; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into existing operations; permits and licences for mining and exploration in China; title to properties; non-controlling interest shareholders; acquisition of commercially mineable mineral rights; financing; competition; operations and political conditions; regulatory environment in China; regulatory environment and political climate in Bolivia and Ecuador; integration and operations of Adventus; environmental risks; natural disasters; dependence on management and key personnel; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; conflicts of interest; internal control over financial reporting as per the requirements of the Sarbanes-Oxley Act; outcome of current or future litigation or regulatory actions; bringing actions and enforcing judgments under U.S. securities laws; cyber-security risks; public health crises; the Company's investment in New Pacific Metals Corp. and Tincorp Metals Inc.; and the other risk factors described in the Company's Annual Information Form and filed with the U.S. Securities and Exchange Commission as part of the Company's Form 40-F and other filings with Canadian and U.S. regulators on www.sedarplus.ca and www.sec.gov; could cause actual results and events to differ materially from those expressed or implied in the forward-looking information or could cause our current objectives, strategies and intentions to change. Accordingly, we warn investors to exercise caution when considering statements containing forward-looking information and that it would be unreasonable to rely on such statements as creating legal rights regarding our future results or plans. We cannot guarantee that any forward-looking information will materialize and you are cautioned not to place undue reliance on this forward-looking information. Any forward-looking information contained in this news release represents expectations as of the date of this news release and is subject to change after such date. However, we are under no obligation (and we expressly disclaim any such obligation) to update or alter any statements containing forward-looking information, the factors or assumptions underlying them, whether as a result of added information, future events or otherwise, except as required by law. All of the forward-looking information in this news release is qualified by the cautionary statements herein.
A comprehensive discussion of other risks that impact Silvercorp can also be found in its public reports and filings under the Company's profile on SEDAR+ at www.sedarplus.ca, on EDGAR at www.sec.gov, and on the Company's website at www.silvercorp.ca.
Cautionary Note to United States Investors Concerning Estimates of Reserves and Resources
Reserve and resource estimates included in this news release have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for public disclosure by a Canadian company of scientific and technical information concerning mineral projects. Unless otherwise indicated, all mineral reserve and mineral resource estimates contained in the technical disclosure have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards on Mineral Resources and Reserves. Canadian standards, including NI 43-101, differ significantly from the requirements of the Securities and Exchange Commission, and mineral reserve and resource information included in this news release may not be comparable to similar information disclosed by U.S. companies.
Cloudflare, Inc. (âCloudflareâ) (NYSE: NET) today announced its intention to offer, subject to market conditions and other factors, $2.175 billion aggregate
SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (“Cloudflare”) (NYSE: NET) today announced its intention to offer, subject to market conditions and other factors, $2.175 billion aggregate principal amount of convertible senior notes due 2031 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Cloudflare also expects to grant.
SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced that Cloudflare for Government achieved the Federal Risk and Authorization Management Program (FedRAMP®) High certification and GovRAMP™ Moderate authorization. These achievements enable Federal, State and Local government, defense, education and highly-regulated organizations to use Cloudflare's suite of integrated security, performance, AI and developer services to advance the.
Cloudflare’s Beat-and-Raise Quarter Puts Its AI Edge Story in FocusCloudflare NYSE: NET reported second-quarter 2026 revenue of $696.1 million, up 36% from a year earlier, as the company cited accelerating customer growth, expanding adoption of its Workers developer platform, and demand for products supporting AI-related workloads.
Chief Executive Officer Matthew Prince said the company added more than 80,000 paying customers during the quarter, bringing year-over-year paying-customer growth to 74%. Cloudflare ended the period with 4,698 customers spending more than $100,000 annually, a 27% increase from the prior year. The company added 282 such large customers during the quarter and 986 over the past 12 months, its highest annual net addition total for that customer segment.
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5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest?Dollar-based net retention reached 120%, up two percentage points sequentially and six percentage points year over year. Large customers accounted for 73% of quarterly revenue, compared with 71% in the second quarter of 2025.
Profitability, Cash Flow and Outlook Cloudflare reported non-GAAP operating income of $96.1 million, up 33% from $72.3 million a year earlier. Its non-GAAP operating margin was 13.8%, improving 240 basis points sequentially but declining 30 basis points year over year.
A $1.5 Billion Wake-Up Call for Every AI Company on Wall StreetGross margin was 73.1%, up 30 basis points from the first quarter and down 320 basis points from a year earlier. Chief Financial Officer Thomas Seifert said the company continued to see more network costs allocated to cost of revenue as paid traffic grew relative to free traffic, although he said that trend was beginning to stabilize. Seifert said Cloudflare expects gross margin to stabilize around current levels, while total unit economics improve through the remainder of the year.
Free cash flow was $56.4 million, or 8% of revenue, compared with $33.3 million, or 6% of revenue, in the prior-year period. Cloudflare ended the quarter with $4.2 billion in cash equivalents and available-for-sale securities. Remaining performance obligations totaled $2.732 billion, up 7% sequentially and 38% year over year.
The company reported non-GAAP net income of $107.8 million, or $0.29 per diluted share. Seifert said the quarter included $151 million in severance and other restructuring charges, including $99 million paid during the period. Cloudflare now expects up to $165 million of restructuring charges for the full year, with up to $130 million expected to be cash-related.
Third-quarter revenue is expected to be $736 million to $737 million, representing 31% year-over-year growth. Third-quarter operating income is expected to be $129 million to $130 million. Full-year revenue is expected to be $2.864 billion to $2.870 billion, or 32% growth. Full-year operating income is expected to be $443 million to $445 million. Cloudflare expects full-year diluted non-GAAP earnings per share of $1.25 to $1.26. Workers Adoption and AI Workloads Prince said Cloudflare added nearly 2 million developers to its platform in the second quarter, bringing its total to more than 7.4 million. The quarterly developer addition exceeded the 1.5 million developers the company added during all of 2025, according to Prince.
The company said its Workers platform is becoming a more meaningful contributor to customer adoption and revenue. Prince said Workers is attracting developers building AI agents because of its lightweight architecture, rapid deployment capabilities and usage-based cost structure. He added that product-led adoption is growing alongside enterprise sales activity, with larger contracts increasingly incorporating the developer platform.
Seifert said Workers products remain Cloudflare’s fastest-growing product area, followed by its SASE and Zero Trust offerings. He also said the company’s revenue mix is evolving beyond a traditional ratable software-as-a-service model toward a mix that includes consumption arrangements, pool-of-funds contracts and “T-shirt sizing” structures.
Prince highlighted several customer contracts involving application services, Zero Trust, network security and Workers. These included a five-year, $31.8 million contract with a digital-native media company; a three-year, $11 million agreement with a European Global 2000 technology company; and a one-year, $7.5 million pool-of-funds deal with a generative AI company for the developer platform.
Agentic Internet Strategy Prince said more than 50% of traffic across Cloudflare’s network was non-human for the first time during the second quarter. He said the company expects machine-to-machine traffic to continue expanding rapidly as AI agents increasingly access websites, APIs and other online resources.
Cloudflare said it is developing infrastructure and commercial tools intended to support what Prince called the “agentic Internet.” Since the beginning of the third quarter, the company has introduced Monetization Gateway, Wallets and cloudflare.pay. Prince said those offerings are designed to enable content owners and other businesses to charge for resources accessed by AI agents and to allow autonomous payment and identity verification between buyers and sellers.
Prince said Cloudflare’s approach differs from infrastructure providers focused on leasing commodity compute or GPU capacity. Rather than participating in what he described as an AI infrastructure “arms race,” he said Cloudflare is focused on delivering work efficiently across its global network and maximizing utilization of its capital investments.
“We’re in a very different business than the hyperscalers,” Prince said, arguing that Cloudflare’s model centers on selling completed work rather than renting servers.
Cloudflare also said it sees a growing opportunity in securing AI agents. Prince said large organizations are increasingly asking how to deploy AI securely, and he expects agent security to become an important consideration for customers evaluating Zero Trust and SASE platforms.
About Cloudflare (NYSE:NET)Cloudflare, Inc is a global web infrastructure and security company that provides a suite of services designed to improve the performance, reliability and security of internet properties. Its core offerings include a content delivery network (CDN), distributed denial-of-service (DDoS) protection, managed DNS, and a web application firewall (WAF). Cloudflare also provides tools for bot management, SSL/TLS, load balancing and rate limiting to help organizations maintain uptime and protect web applications from attack.
In addition to traditional edge and security services, Cloudflare has expanded into edge computing and developer platforms.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Should You Invest $1,000 in Cloudflare Right Now?Before you consider Cloudflare, you'll want to hear this.
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The AI boom is creating opportunities across semiconductors, cloud computing, enterprise software, infrastructure, cybersecurity, and automation.
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More than half of the traffic that crossed Cloudflare's (NET +5.57%) network last quarter came from machines, not people -- the first time automated traffic has been the majority.
Shares of the internet-infrastructure company jumped to a record high Friday morning after Thursday's second-quarter report, touching about $325 before giving back part of the day's gain. Shares were still up about 8% for the day as of this writing.
"For the first time in human history, in Q2, more than 50% of the traffic flowing across Cloudflare's network was not human," CEO Matthew Prince said on the earnings call. The crossover arrived months ahead of his own forecast, which had pointed to the first half of 2027.
With this backdrop, revenue rose 36% year over year to $696.1 million, and Cloudflare raised its full-year revenue outlook to a range of $2.864 billion to $2.870 billion, about 32% growth. Adjusted earnings per share came in at $0.29, and free cash flow climbed 69% year over year to $56.4 million. For the third quarter, management guided to revenue of $736 million to $737 million, about 31% growth.
And customer growth was strong, too. Cloudflare ended June with 4,698 large customers (those spending more than $100,000 a year), up 27% year over year. And existing customers are spending more, with dollar-based net retention (how much more the same customers spend than a year earlier, after churn) reaching 120%, up 2 percentage points from the first quarter and 6 points from a year ago.
Image source: Getty Images.
Where the money shows up The machine traffic itself doesn't pay Cloudflare yet. The company earns subscriptions from businesses that use its network for cybersecurity and speed.
Today's Change
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Current Price
$
300.27
So serving a fast-growing volume of artificial intelligence (AI) crawler traffic mostly adds cost without adding sales. On that measure, a majority-machine network makes Cloudflare busier, not bigger.
The bigger-business case rests on charging for what the machines do. Cloudflare has spent the past year building tools that let websites block AI crawlers or charge them for access, and Prince says the company is now building the payment infrastructure for machine-to-machine commerce. He has argued the advertising model that funded the internet for roughly a quarter century is giving way to something different, and Cloudflare wants to operate the payment layer that replaces it.
For now, the growth that investors just paid a record price for comes from the ordinary business -- more customers, spending more, often on AI-related security. The 50% milestone is volume rather than revenue. Whether it converts depends on a payment layer the company is still building.
Cloudflare (NYSE:NET) shares were set to open sharply higher on Friday after the cloud connectivity company reported second quarter results that topped analyst expectations and issued stronger-than-expected guidance for the current quarter.
Shares of Cloudflare were indicated to open about 15% higher following the results.
Cloudflare reported adjusted earnings of $0.29 per share for the second quarter, compared with analyst estimates of $0.27, while revenue rose 36% year over year to $696.1 million, ahead of consensus expectations of $665.5 million.
The company attributed the growth to continued demand across its platform, including from AI-driven infrastructure needs. Current remaining performance obligations grew 35% year over year, while Cloudflare also reported record growth in total paying customers, large customers and developers on its platform.
“We delivered a stellar second quarter, highlighted by revenue accelerating to $696.1 million, up 36% year-over-year, and record growth in total paying customers, large customers, and developers on our platform,” said Matthew Prince, CEO of Cloudflare.
“The business model of the web is changing, and no company is better positioned than Cloudflare to help define its future.”
Cloudflare posted GAAP gross profit of $499.5 million, compared with $383.6 million a year earlier, while GAAP gross margin declined to 71.8% from 74.9%.
GAAP loss from operations widened to $205.7 million, or 29.6% of revenue, from $67.3 million, or 13.1% of revenue, a year earlier. On a non-GAAP basis, operating income increased to $96.1 million from $72.3 million.
GAAP net loss was $170 million, compared with a loss of $50.4 million in the second quarter of 2025. Non-GAAP net income rose to $107.8 million from $75.1 million, while non-GAAP net income per diluted share increased to $0.29 from $0.21.
Operating cash flow was $117.6 million, up from $99.8 million a year earlier, while free cash flow increased to $56.4 million from $33.3 million.
For the third quarter, Cloudflare expects revenue of $736 million to $737 million, above analyst estimates of $722.1 million. The company expects adjusted earnings of $0.34 per share, compared with the $0.32 consensus estimate.
Cloudflare also expects third-quarter non-GAAP operating income of $129 million to $130 million, using weighted average common shares outstanding of approximately 374 million.
This is a fair market value price provided by Massive. Learn more.
52-Week Range$158.83▼
$324.73Price Target$307.37
Cloudflare NYSE: NET is handling AI in a way the market increasingly likes, and investors are rewarding the stock. While heavily exposed to AI infrastructure and a focal point for global internet traffic, it isn’t a hyperscaler but merely a well-positioned service provider. The critical factor is its distributed network of datacenters, which are built and located differently.
While hyperscalers provide full-stack capability, underpinning AI training and inference (alongside the bulk of Internet functionality), Cloudflare is focused on edge architecture for routing, security, and serverless execution—it is its own layer, sitting atop the hyperscale universe, enabling the lightning-fast speeds required for real-time AI development and applications.
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Cloudflare is growing, growing profitably, and, while cash flow is impaired by investments, it is growing. Cloudflare is not leaning heavily into debt, is not whittling down its cash pile, and is, in fact, doing the opposite. That puts it in a very unique position and one that the market likes.
Cloudflare’s Beat-and-Raise Quarter Resets ExpectationsCloudflare had a solid Q2, growing revenue by 35.9% year-over-year (YOY) to $696.1 million, accelerating from previous periods and outperforming the consensus despite the high bar analysts set. The strength was driven by new clients, large clients, and developers, with total clients, large clients, and developers setting records. Details emerging from the report include a 24% compound annual growth rate among large clients and expanding total addressable market projections. As it stands, the company sees a path to a 60% larger market within two years, setting the stage for sustained high-level growth for the foreseeable future.
Margin is another area of strength. The company’s gross margins contracted but were largely offset by non-cash adjustments, operational quality, and non-operational income, leaving adjusted earnings in a healthy condition. Adjusted income from operations grew by 32%, trailing the top line by only 390 basis points, while net income increased by more than 43% and adjusted earnings per share (EPS) outperformed the consensus. Up 38% YOY, adjusted EPS outperformed estimates by more than 700 basis points and led management to lift guidance.
Guidance is the catalyst for higher share prices. As strong as the Q2 results are, the guidance is stronger, pointing to accelerating and sustained growth over time, with the low end of the Q3 and full-year revenue ranges and EPS target well above the consensus. Given the momentum shown in Q2 results, including the rise of agentic traffic, which now accounts for more than 50% of Cloudflare’s traffic, guidance is likely to be low.
And the analyst response was overwhelmingly bullish, citing the largest revenue beat in 18 quarters, and the largest dollar beat in history, alleviating fears of AI disruption for this enterprise software stock.
As important as Cloudflare’s distributed network is to the outlook, the software stack is what makes it work. The opportunity today is Cloudflare’s ability to monetize agentic traffic, and it is already well established in this regard.
The initial reaction included numerous price hikes, with a new high target set near $400. While the consensus price target continues to lag the action, the trend is supportive, with the high-pend suggesting more than 35% of upside is possible relative to the pre-release close.
Given expectations for future results, the analysts' trends will likely remain bullish through the year’s end, underpinning the stock price action.
Cloudflare Surges, and Risks Rise With ItOverall MarketRank™58th Percentile
Analyst RatingModerate Buy
Upside/Downside4.8% Downside
Short Interest LevelHealthy
Dividend StrengthN/A
News Sentiment0.60 Insider TradingSelling Shares
Proj. Earnings Growth866.67%
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The stock price action is bullish. Cloudflare moved to a fresh high over the summer and is gaining momentum in Q3. The Q2 results triggered a double-digit price surge, putting the stock at fresh highs and well on its way to the analysts’ high-end target. The risk is that Cloudflare’s market moved too high, too quickly, and may enter a consolidation before advancing further. In this scenario, NET’s price may pull back to $300 to close the price gap it formed before resuming upward momentum.
Cloudflare’s catalysts include a suite of tools for tracking and monetizing agentic AI traffic, as well as developer adoption. The company’s distribution network and serverless functionality enable cost-effective deployment of routine AI agents. The company boasts more than 4.5 million active developers, and the number is growing quarterly.
Cloudflare’s biggest risk is its importance to the Internet. Handling an estimated 20% of global Internet traffic, it is a single point of failure with a wide-ranging impact. With cyber threats growing as quickly as agentic traffic and Cloudflare among the juiciest targets, the threat is real. Valuation is another concern. Trading at over 250x the low end of its guidance, Cloudflare is priced for perfection and can’t make a single misstep.
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Cloudflare is the latest company to join the race to build a new web browser. But instead of pitching a Chrome alternative to consumers, the internet infrastructure provider launched Kitesurf, a cloud-hosted browser designed specifically for AI agents.
AI software is evolving from chatbots that answer questions to agents that can complete tasks on users’ behalf. Browsers are a critical part of this transition, as they’ll need to navigate the web and use websites, as humans do.
Unlike traditional web browsers built for humans, a browser built for AI agents doesn’t care about visual elements, like themes, tabs, or browser extensions, Cloudflare explained in its announcement. A browser designed for AI agents needs to manage context windows, performance, token costs, and scalability. It also faces a different threat model because an AI browser could be subject to vulnerabilities like prompt injection attacks and more, the company noted.
With Kitesurf, AI developers will be able to build software that can navigate websites, fill out forms, and complete other browser-based tasks, without having to build their own browser software.
Cloudflare says it decided to build Kitesurf just 12 weeks ago, and it runs entirely on top of the company’s serverless platform, called Workers. Kitesurf is available for free while in beta in Browser Run, which lets developers programmatically control and interact with headless browser instances on Cloudflare’s network.
For developers, Cloudflare’s pitch is that this enables AI agents to use the web more efficiently while using less computing power than Chromium, which keeps costs down.
“Kitesurf is significantly more efficient in CPU and memory consumption than Chromium for common agentic tasks like screenshots and HTML extraction,” according to the company.
Image Credits:Cloudflare The browser itself was built from other technologies, including a modular rendering engine from Blitz; Firefox’s CSS parser, Stylo; and Boa JS, a Rust ECMAScript engine. Everything else runs inside Cloudflare Workers. Although still new, Cloudflare says Kitesurf already passes around 215,000+ web platform tests, and it’s adding hundreds more, passing tests every week.
Cloudflare also credited the open source Rust headless engine, Obscura, for inspiring it to develop Kitesurf, noting that the first proof of concept was a port of Obscura to Workers.
The company said the browser correctly renders pages like TodoMVC, a popular benchmark application for comparing JavaScript frameworks, along with Wikipedia, Hacker News, the Cloudflare Blog, and much of the Cloudflare dashboard.
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Key Takeaways Cloudflare's Q2 revenues rose 35.9% to $696.1 million, while non-GAAP EPS increased 38.1% to 29 cents.NET ended Q2 with 4,698 large customers, up 27%, as large accounts generated 73% of quarterly revenues.Cloudflare projects 2026 revenues of $2.864B-$2.870B, with non-GAAP EPS of $1.25-$1.26. Cloudflare, Inc. (NET - Free Report) reported second-quarter 2026 non-GAAP earnings of 29 cents per share, which rose 38.1% year over year and topped the Zacks Consensus Estimate by 7.4%. Revenues climbed 35.9% to $696.1 million and surpassed the consensus mark by 4.6%.
Growth was supported by strong large-customer additions, rapid adoption of the Workers developer platform and solid go-to-market execution. Dollar-based net retention reached 120%, improving 2 percentage points sequentially and 6 points year over year.
NET's Large Customer Momentum AcceleratesCloudflare ended the quarter with 4,698 customers generating more than $100,000 in annualized revenues, up 27% year over year. The company added 282 large customers sequentially and a record 986 over the past 12 months.
Large customers accounted for 73% of quarterly revenues compared with 71% a year earlier. NET also recorded its highest-ever year-over-year net additions across every large-customer tier, ranging from more than $100,000 to more than $5 million in annualized revenues.
Cloudflare Sees Broad Geographic GrowthThe United States generated 51% of total revenues and grew 41% year over year. EMEA contributed 27% of revenues, rising 30%, while APAC represented 14% and advanced 32%.
Customer acquisition also remained strong. Cloudflare added more than 80,000 paying customers during the quarter, driving 74% year-over-year growth in the paying-customer base. Management said new-customer bookings increased at the fastest pace in more than five years, while new pipeline generation continued to accelerate.
NET Improves Sequential ProfitabilityNon-GAAP gross profit totaled $508.9 million, with gross margin of 73.1%. The margin improved 30 basis points sequentially, marking the first sequential expansion in eight quarters, although it declined 320 basis points from the year-ago period.
Non-GAAP operating income increased 32.9% year over year to $96.1 million. The corresponding operating margin was 13.8%, up 240 basis points sequentially but down 30 basis points year over year. Operating expenses represented 59% of revenues, down 3 percentage points from a year earlier.
Cloudflare's AI Platform Gains TractionCloudflare ended the quarter with more than 7.4 million developers on its platform after adding nearly 2 million during the second quarter alone. Management highlighted rapid growth in Workers and agentic workloads as key contributors to business momentum.
The company also said more than half of the traffic flowing across its network during the quarter was nonhuman. Cloudflare is expanding its infrastructure for agent-driven activity through products such as Monetization Gateway, wallets and cloudflare.pay while positioning its developer platform for AI applications and machine-to-machine traffic.
NET Generates Strong Cash FlowFree cash flow increased 69.4% year over year to $56.4 million and represented 8% of revenues compared with $33.3 million and 6% of revenues in the prior-year quarter. Network capital expenditures represented 7% of revenues.
Cloudflare finished June with $4.16 billion in cash, cash equivalents and available-for-sale securities. Remaining performance obligations reached $2.73 billion, up 38% year over year and 7% sequentially. Current remaining performance obligations represented 64% of the total and increased 35% year over year.
Cloudflare Provides Strong 2026 OutlookFor the third quarter of 2026, Cloudflare expects revenues between $736 million and $737 million, implying growth of about 31% year over year. Non-GAAP operating income is projected between $129 million and $130 million, while non-GAAP earnings are expected to be 34 cents per share.
For 2026, revenues are projected between $2.864 billion and $2.870 billion, representing roughly 32% year-over-year growth. Non-GAAP operating income is expected between $443 million and $445 million, while non-GAAP earnings are forecast in the range of $1.25-$1.26 per share.
NET’s Zacks Rank & Other Stocks to ConsiderCloudflare currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum (LITE - Free Report) , Applied Materials (AMAT - Free Report) and Analog Devices (ADI - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Lumentum have surged 127.4% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year.
Shares of Applied Materials have jumped 105.2% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.17 per share, up by 3 cents over the past seven days, suggesting a rise of 29.2% year over year.
Analog Devices shares have rallied 39.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, implying an increase of 59.4% year over year.
Tim Bohen from StocksToTrade.com has his eyes on three technology names for today's Big 3. First, Digital Turbine (APPS), where he says reports of the company's demise may have been "greatly exaggerated" as it trades to a 3-year high.
Cloudflare (NYSE:NET) shares were set to open sharply higher on Friday after the cloud connectivity company reported second quarter results that topped analyst expectations and issued stronger-than-expected guidance for the current quarter.
Shares of Cloudflare were indicated to open about 15% higher following the results.
Cloudflare reported adjusted earnings of $0.29 per share for the second quarter, compared with analyst estimates of $0.27, while revenue rose 36% year over year to $696.1 million, ahead of consensus expectations of $665.5 million.
The company attributed the growth to continued demand across its platform, including from AI-driven infrastructure needs. Current remaining performance obligations grew 35% year over year, while Cloudflare also reported record growth in total paying customers, large customers and developers on its platform.
“We delivered a stellar second quarter, highlighted by revenue accelerating to $696.1 million, up 36% year-over-year, and record growth in total paying customers, large customers, and developers on our platform,” said Matthew Prince, CEO of Cloudflare.
“The business model of the web is changing, and no company is better positioned than Cloudflare to help define its future.”
Cloudflare posted GAAP gross profit of $499.5 million, compared with $383.6 million a year earlier, while GAAP gross margin declined to 71.8% from 74.9%.
GAAP loss from operations widened to $205.7 million, or 29.6% of revenue, from $67.3 million, or 13.1% of revenue, a year earlier. On a non-GAAP basis, operating income increased to $96.1 million from $72.3 million.
GAAP net loss was $170 million, compared with a loss of $50.4 million in the second quarter of 2025. Non-GAAP net income rose to $107.8 million from $75.1 million, while non-GAAP net income per diluted share increased to $0.29 from $0.21.
Operating cash flow was $117.6 million, up from $99.8 million a year earlier, while free cash flow increased to $56.4 million from $33.3 million.
For the third quarter, Cloudflare expects revenue of $736 million to $737 million, above analyst estimates of $722.1 million. The company expects adjusted earnings of $0.34 per share, compared with the $0.32 consensus estimate.
Cloudflare also expects third-quarter non-GAAP operating income of $129 million to $130 million, using weighted average common shares outstanding of approximately 374 million.
Cloudflare shares NET surged in premarket trading on Friday after the cloud services company raised its full-year revenue and earnings forecasts, signaling continued strength in demand for artificial intelligence infrastructure and cybersecurity services.
The stock rose more than 16% before the opening bell after the company lifted its fiscal 2026 outlook following second-quarter results.
The upbeat guidance came shortly after Amazon reported its strongest cloud growth in more than four years while warning that demand for cloud capacity is expected to outstrip supply in 2026, reinforcing investor optimism around AI infrastructure spending.
Cloudflare now expects full-year revenue between $2.86 billion and $2.87 billion, up from its previous forecast of $2.805 billion to $2.813 billion.
The updated outlook is also ahead of analysts' consensus estimate of $2.81 billion, according to LSEG data.
The company also increased its adjusted earnings forecast to between $1.25 and $1.26 per share from its earlier outlook of $1.19 to $1.20. Wall Street had expected fiscal 2026 earnings of about $1.20 per share.
Analysts pointed to Cloudflare's growing exposure to AI infrastructure as a key driver behind the stronger guidance.
Morgan Stanley said the company's Workers developer platform was its fastest-growing business, benefiting from a shift toward a usage-based model.
Morningstar also described Cloudflare as a "compelling picks-and-shovels play" on AI adoption, citing its ability to support inference workloads at the edge and its consumption-based business model.
Morningstar noted that developer adoption continued to accelerate, with the number of developers using Workers increasing to 7.4 million from 4.5 million in December.
Channel partner sales also grew 67% during the quarter and accounted for 31% of total revenue, reflecting stronger enterprise demand.
Analysts also said Cloudflare is well positioned to benefit from rising cybersecurity spending as AI adoption reshapes the cyber-risk landscape.
RBC Capital Markets said the company "has multiple, durable avenues to AI-monetization over the long-to-medium term that warrants a premium valuation."
Brokerages responded positively to the company's results and outlook.
TD Cowen raised its price target on Cloudflare to $355 from $300 while maintaining its Buy rating.
The firm said the company delivered record year-over-year additions across large customer segments and large contracts, adding that Cloudflare is "well positioned to play a lead role as AI unfolds."
Barclays also lifted its price target to $355 from $300 while reiterating its Overweight rating, pointing to accelerating revenue growth during the quarter.
Chief Executive Matthew Prince said the company's momentum accelerated during the second quarter, supported by record additions of large customers, stronger developer adoption and growing enterprise demand.
“It's clear that the agentic future needs a new kind of cloud. Developers are flocking to Cloudflare because our Workers developer platform gives them what they need to build that agentic future. We're the fastest, we're the most secure, and the most cost-effective place to build, deploy, and scale agents and the code they generate,” Prince said during the earnings call.
Prince also said more than half of the traffic flowing across Cloudflare's network was non-human for the first time during the quarter as AI agents increasingly interacted with websites and online services.
He described the shift as “a fundamental rewrite of the Internet,” adding that Cloudflare is building the infrastructure, developer tools and payment systems needed to power what he called the “agentic Internet.”
Cloudflare (NET), the connectivity and cybersecurity cloud provider, rose 15.73% after reporting second-quarter revenue of $696.1 million, up 36% and well past
Cloudflare Inc. (NET, Financials), the cloud networking and cybersecurity company, jumped 16% in premarket trading Friday after raising its full-year outlook as
Software stocks are surging Friday, led by Atlassian (NASDAQ:TEAM | TEAM Price Prediction) stock, which has jumped 34% to $148.09 after a stronger-than-expected quarterly report and encouraging fiscal 2027 outlook. Twilio (NYSE:TWLO) stock is also up 27% to $245.80, while Cloudflare (NYSE:NET) stock has advanced 9% to $310.06 following strong quarterly results and an improved outlook.
The broader market is providing a favorable backdrop, with the NASDAQ 100 tracking Invesco QQQ Trust (NASDAQ:QQQ) up 0.66% to $719.24. A weaker-than-expected July jobs report has reduced expectations for a September interest-rate hike, giving investors another reason to favor growth-oriented technology stocks.
Atlassian Emerges As an AI Beneficiary Atlassian stock is leading the software-sector rally after the company finished fiscal 2026 on a strong note and provided a better-than-expected cloud growth outlook for fiscal 2027. Bank of America upgraded Atlassian to Buy from Neutral and raised its price target to $175 from $105, arguing that the company’s workflow and collaboration data could become an increasingly valuable AI asset.
Jefferies also raised its price target to $200 from $150, pointing to 31% cloud revenue growth in the fourth quarter and fiscal 2027 guidance for 25.5% growth. Wells Fargo raised its target to $180 from $140, saying the results reduced concerns about declining developer seats while highlighting Atlassian’s increasingly important role in an AI-driven software market.
Twilio Gets a Beat-And-Raise Boost Twilio stock is surging after the communications-platform company delivered what Bank of America described as a “beat-and-raise” second-quarter report. Bank of America raised its TWLO stock price target to $270 from $235 and maintained a Buy rating, arguing that Twilio’s long-term growth potential as a share gainer in the communications-platform-as-a-service market remains underappreciated.
Furthermore, Jefferies raised its target to $240 from $195 and said Twilio “delivered in spades” despite a high bar following its strong first quarter and sharp year-to-date rally. Wells Fargo also raised its target to $275 from $225, citing reacceleration in Voice and organic revenue as signs that Twilio’s fundamentals are improving.
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Cloudflare Benefits From AI Demand Cloudflare stock is also climbing following strong second-quarter results, accelerating revenue growth and higher guidance. Goldman Sachs raised its NET stock price target to $389 from $266, pointing to agentic AI adoption, rapid expansion of the Workers platform and emerging opportunities tied to what it described as a new internet business model.
Meanwhile, TD Cowen raised its target to $355 from $300, highlighting 36% year-over-year revenue growth and record net additions across large customer tiers and contracts. Wells Fargo lifted its target to $380 from $300, while UBS raised its target to $350 from $250 and cited accelerating growth, higher fiscal 2026 guidance, improving margins and strong go-to-market execution.
Software Stocks Find Multiple Catalysts The common thread among Friday’s biggest software-sector winners is that each company has delivered a company-specific catalyst that is helping investors rethink its growth outlook. Atlassian is benefiting from stronger cloud expectations and growing optimism around its AI opportunity, Twilio is showing improving fundamentals and AI-related momentum, and Cloudflare continues to demonstrate strong demand across its platform.
The broader market backdrop is helping to amplify those gains, particularly with investors now seeing less risk of an immediate interest-rate increase. Still, the size of Friday’s moves means expectations are rising quickly, and investors will need to see continued execution to justify the higher valuations.
Investors can watch whether Atlassian sustains its cloud growth, Twilio continues its revenue reacceleration and Cloudflare maintains its AI-driven momentum. Given the magnitude of the gains, investors choosing to participate in these software stocks may want to keep their share-position sizes small rather than load up after sharp one-day rallies.
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Key Takeaways Cloudflare ended Q2 with 4,698 $100K customers, up 27%, as net retention reached 120%.Workers, agentic workloads and go-to-market execution helped drive current RPO up 35% year over year.NET guided Q3 revenues to $736M-$737M as usage-based contracts add quarter-to-quarter variability. Cloudflare, Inc. (NET - Free Report) used its second-quarter 2026 earnings call to frame Workers, agentic AI and large-customer expansion as key growth drivers. CEO Matthew Prince also emphasized improving sales productivity and broader adoption across customer tiers.
CFO Thomas Seifert paired that momentum with a caution on forecasting: Cloudflare’s growing mix of consumption, pool-of-funds and other usage models can make quarter-to-quarter revenues less predictable even as multi-quarter trends remain strong.
NET Sees Workers and Large-Customer MomentumPrince said Cloudflare ended the quarter with 4,698 customers spending more than $100,000 annually, up 27% year over year, while dollar-based net retention reached 120%. The platform topped 7.4 million developers after adding nearly 2 million in the second quarter.
The company’s second-quarter 2026 adjusted earnings of $0.29 per share topped the Zacks Consensus Estimate of $0.27. Revenues of $696.1 million also exceeded the Zacks Consensus Estimate of $665.4 million by 4.60%.
Seifert said strength came from Workers, agentic workloads, large-customer momentum and go-to-market execution. Current RPO grew 35% year over year.
Cloudflare Expands Agentic Commerce AmbitionsPrince said more than half of traffic across Cloudflare’s network was nonhuman in the second quarter, reflecting rapid growth in AI-agent activity. He framed that shift as a major change in how Internet traffic will be generated and monetized.
The company introduced Monetization Gateway, wallets and cloudflare.pay as building blocks for agent-driven commerce. Prince said the goal is to let agents access resources, establish trust and pay autonomously.
Prince also highlighted a research pilot with OpenAI aimed at a more sustainable relationship between AI companies and content owners. He said additional initiatives are planned over the coming months.
NET Guidance Reflects Growth With More VariabilitySeifert guided third-quarter 2026 revenue to $736 million to $737 million, with operating income of $129 million to $130 million and diluted earnings of $0.34 per share.
For full-year 2026, he expects revenue of $2.864 billion to $2.870 billion, operating income of $443 million to $445 million and diluted earnings of $1.25 to $1.26 per share.
Asked about pool-of-funds renewals by a Morgan Stanley analyst, Seifert said Cloudflare is shifting from a ratable SaaS model toward more pool-of-funds, consumption and T-shirt-size structures. Faster usage and renewals can raise quarter-to-quarter variability, supporting prudent guidance.
Cloudflare Q&A Highlights Security and MonetizationA Morgan Stanley analyst asked about securing AI agents. Prince said demand is already visible, with large organizations increasingly asking how to deploy AI securely and with agent-aware controls across SASE and Zero Trust.
A Citi analyst asked about Workers monetization. Prince said Workers has moved beyond an adoption-focused phase and has become a meaningful revenue contributor, with more pool-of-funds contracts incorporating the platform.
An RBC Capital Markets analyst asked about Cloudflare OS. Prince said its security, auditability and control framework has helped extend AI tools beyond developers to finance, legal and procurement.
NET Holds the Line on Capital EfficiencyA Scotiabank analyst asked why Cloudflare is not joining the AI infrastructure spending race. Prince said commodity compute is not an attractive model and emphasized extracting more utilization from each capital dollar.
Non-GAAP gross margin was 73.1%, and Seifert said he expects it to stabilize around that level while total unit economics expand in the second half.
Seifert said full-year restructuring charges are expected to be up to $165 million, with up to $130 million cash-related, higher than initially anticipated. In response to a William Blair analyst, he said Cloudflare is pacing ahead of its goal of GAAP profitability by the end of 2028.
Cloudflare Keeps Focus on ExecutionPrince and Seifert maintained a confident posture on demand while tying Cloudflare’s direction to disciplined execution and capital efficiency.
Their priorities center on converting developer adoption into revenue, deepening large-customer use, building agentic commerce infrastructure and improving unit economics as the contract mix evolves.
NET's Zacks Signals Point to a Mixed Style ProfileNET carries a Zacks Rank #2 (Buy) at present. Its Growth Score of A is the strongest Style Score signal, while the Value Score of F, Momentum Score of C and VGM Score of C indicate a mixed profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Within the Zacks framework, top-ranked stocks pair most favorably with A or B Style Scores. NET’s A Growth Score fits that preference, while its other grades do not. The Zacks Rank can change as earnings estimates are revised after the reported results.
Cloudflare Inc. (NYSE:NET) shares are surging Friday after the internet security and infrastructure company shattered second-quarter expectations on both the top and bottom lines.
Cloudflare shares are testing new highs. Why did NET hit a new high? Revenue Accelerates as Cloudflare Delivers a Standout QuarterAdjusted earnings of 29 cents per share arrived 7.4% above the 27 cent consensus while revenue of $696.06 million topped the $665.5 million estimate and expanded 36% from the $512.32 million the company generated in the comparable period a year earlier.
Remaining performance obligations on a current basis grew 35% from the prior year. CEO Matthew Prince described the period as stellar, pointing to record additions across total paying customers, large enterprise customers and developers building on the platform as evidence of the company’s broadening commercial reach.
Raised Guidance on Both Revenue and Earnings Tops Analyst ExpectationsCloudflare lifted its fiscal 2026 adjusted EPS outlook to a range of $1.25 to $1.26, clearing the $1.21 consensus, while simultaneously raising its full-year revenue forecast to $2.86 billion to $2.87 billion, a range that sits above the prior $2.81 billion analyst estimate.
Six Analysts Raise Price Targets Following the Strong Print BTIG’s Gray Powell maintained Buy and raised his target to $382 from $314 Needham’s Mike Cikos maintained Buy and raised his target to $380 from $280 Oppenheimer’s Param Singh maintained Outperform and raised his target to $380 from $330 Keybanc’s Jackson Ader maintained Overweight and raised his target to $375 from $300 Barclays’ Saket Kalia maintained Overweight and raised his target to $355 from $300 Truist Securities’ Junaid Siddiqui maintained Buy and raised his target to $350 from $300 NET’s Breakout Math: Distance From the Averages Tells the StoryThe longer‑term trend is still firmly pointed higher. NET sits 9.7% above its 20‑day SMA, 18.1% above its 50‑day SMA, 30.6% above its 100‑day SMA and 41.1% above its 200‑day SMA, an extended posture that rewards trend followers and frustrates anyone waiting for a more comfortable entry.
The moving‑average stack reinforces that strength. The 20‑day SMA is above the 50‑day SMA, and the May golden cross keeps the broader setup aligned with trend continuation rather than mean reversion. Momentum is telling the same story. MACD is above its signal line and the histogram is positive, pointing to improving upside pressure versus the prior downswing. In practice, buyers are absorbing pullbacks faster than sellers can press them.
The immediate question is whether NET can hold above the prior breakout zone near the old high around $305.00. If it does, that reclaimed level often becomes the new line in the sand for trend continuation. If it doesn’t, momentum traders tend to tighten risk quickly. Below that, the notable support marker is $250.50, a level where buyers previously stepped in.
NET Shares Are FlyingNET Price Action: Cloudflare shares were up 7.04% at $304.44 at the time of publication on Friday. The stock is trading at a new 52-week high, according to Benzinga Pro.
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The logo of digital security firm Cloudflare is displayed over a booth at the Web Summit digital trade show in Vancouver, British Columbia, Canada, May 12, 2026. REUTERS/Chris Helgren Purchase Licensing Rights, opens new tab
Aug 7 (Reuters) - Cloudflare (NET.N), opens new tab shares rose before the bell on Friday after the cloud services firm raised its annual forecasts, betting that resilient AI-driven demand will sustain traffic across its network.
Quarterly results of Cloudflare, whose shares were last up 16.2% at $330.51, follow Amazon.com's (AMZN.O), opens new tab strongest cloud growth in more than four years. Amazon noted that it won't have enough capacity to meet all demand in 2026.
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The two reports underscore that software companies remain key winners of the ongoing scramble to build AI infrastructure.
Cloudflare now expects full-year revenue of $2.86 billion to $2.87 billion, up from its prior expectation of $2.805 billion to $2.813 billion. The new forecast, released after markets closed on Thursday, exceeds analysts' average estimate of $2.81 billion, according to LSEG-compiled data.
Analysts at Morgan Stanley said the company's Workers developer platform was its fastest-growing segment, amid a shift toward a usage-based model, expecting the company to exceed its outlook.
Cloudflare's also increased its adjusted per share earnings forecast to a range of $1.25 to $1.26 from its earlier estimate of $1.19 to $1.20.
Analysts also highlight that Cloudflare stands to benefit as cybersecurity becomes more necessary as cutting-edge AI models reshape the cyber-risk landscape.
Cloudflare shares have gained over 44% so far this year, compared with a near-77% rise in rival CrowdStrike (CRWD.O), opens new tab and a 95% jump in Palo Alto Networks (PANW.O), opens new tab. The stock trades at over 190 times its forward price-to-earnings ratio, compared with over 145 for CrowdStrike, according to LSEG-compiled data.
The company, analysts at RBC Capital Markets note, "has multiple, durable avenues to AI-monetization over the long-to-medium term that warrants a premium valuation."
Reporting by Purvi Agarwal in Bengaluru; Editing by Joyjeet Das
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Stock futures are pointing higher as the major indexes look to close out their best week in months; the government's July jobs report is expected to show a pickup in hiring from June; Cloudflare shares are jumping after a strong earnings report and raised outlook; Atlassian shares are also soaring after better-than-expected results; and a New Mexico judge has ruled that Meta must create a $567 million fund for those harmed by social media. Here's what you need to know today.
New AEO Visibility Dashboard gives brand marketers a clear view of how AI assistants are citing, mentioning, and ranking them
SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today released the AEO Visibility Dashboard, the newest addition to its Answer Engine Optimization (AEO) Suite. The tool gives website owners a direct view into whether AI assistants are recommending their business when customers ask relevant questions – something that, until now, has been invisible to most site owners. The AEO Visibility Dashboard joins Agent Readiness, the existing tool in the suite that checks whether AI agents can find and read a site in the first place. Together, this gives marketers the data they need to understand and optimize their content.
AI assistants have become a primary discovery channel for consumers, but brands have had no equivalent of a search ranking to show where they stand. When a customer asks an AI for a recommendation and gets a name back, there has been no signal to tell a brand whether it was recommended, briefly mentioned, or skipped entirely. Most tools attempt to fill that gap by only sending test prompts to AI chatbots and sampling the responses — a method limited in scale and prone to inconsistency if not paired with other data signals. Cloudflare's position is different: because it operates at the network layer between AI platforms and the websites they access, observing actual crawl and referral activity directly, across millions of sites. The data creates deeper, more transparent insights than sampling test prompts alone so brands can make more informed decisions.
"Being discoverable used to mean ranking on a page. That's not enough anymore. The agentic era is here, and the moments that matter, like when someone asks an AI for a recommendation and gets an answer back, are happening at scale, invisibly, without most brands knowing if they're in the conversation at all,” said Stephanie Cohen, Chief Strategy Officer at Cloudflare. “Cloudflare sits at the network layer. We see actual signals: real crawl activity, real referrals, what AI systems are genuinely doing across millions of sites. That's what powers these tools. Brands can finally get a real answer to the question they've been asking: how am I showing up, and where?"
Cloudflare built its AEO Suite on a foundational commitment: that site owners should have visibility into how their content is being used, and control over what they choose to share. That means grounding AEO analysis in actual network-layer signals like real crawl activity and real referral data from Cloudflare's own infrastructure. Whether a content owner's goal is to protect and monetize their content, or to maximize discovery in the agentic era, the AEO Suite is designed to serve those interests on their terms. Now, any brand can get the quality data they need in order to:
Stop guessing where to invest content: Citation Rate shows which AI platforms are pulling from a brand's site as a trusted source and which ones are ignoring it. Marketers can direct budget toward testing and optimizing the content and sites that actually drive AI recommendations, not the ones that don't. Diagnose the right problem before spending on the wrong fix: Mention Rate reveals whether AI assistants are naming a brand even when they don't cite its site. A brand that gets mentioned but not cited has an authority problem, not an awareness problem. That distinction changes the strategy entirely. Measure the quality of AI coverage, not just presence: Prominence tracks how much of an AI answer is actually attributed to a brand, and where in the response it appears. A passing mention at the end of a long answer is not the same as a strong, specific recommendation. Marketers get a number that reflects the difference. Track competitive position on the questions that matter: Share of Voice shows how a brand stacks up against competitors across the specific questions its customers are asking AI assistants and whether that position is improving or eroding over time. The AEO Visibility Dashboard Tool joins Agent Readiness, the existing tool in the AEO Suite that checks whether AI systems can find and read a brand's site in the first place. Agent Readiness checks whether an AI agent can actually reach and use a site -- whether it has permission to crawl, a sitemap to navigate, content it can read in a structured format, and, for more advanced use cases, interfaces it can call directly. The AEO Visibility Dashboard then measures what happens downstream: given that agents can reach the site, are they recommending it?
The AEO Visibility Dashboard is available in early access today. Businesses can request access from the Overview tab in the Cloudflare dashboard. Agent Readiness is available in the same location. To learn more, check out the blog below:
Blog: From ranking to recommended: get your site ready to thrive in the age of AI agents About Cloudflare
Cloudflare, Inc. (NYSE: NET) is the leading connectivity cloud company. It empowers organizations to make their employees, applications and networks faster and more secure everywhere, while reducing complexity and cost. Cloudflare’s connectivity cloud delivers the most full-featured, unified platform of cloud-native products and developer tools, so any organization can gain the control they need to work, develop, and accelerate their business.
Powered by one of the world’s largest and most interconnected networks, Cloudflare blocks billions of threats online for its customers every day. It is trusted by millions of organizations – from the largest brands to entrepreneurs and small businesses to nonprofits, humanitarian groups, and governments across the globe.
Learn more about Cloudflare’s connectivity cloud at cloudflare.com/connectivity-cloud. Learn more about the latest Internet trends and insights at radar.cloudflare.com.
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Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “explores,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continues,” or the negative of these words, or other similar terms or expressions that concern Cloudflare’s expectations, strategy, plans, or intentions. However, not all forward-looking statements contain these identifying words. Forward-looking statements expressed or implied in this press release include, but are not limited to, statements regarding the capabilities and effectiveness of AEO Suite and Cloudflare’s other products and technology, the benefits to Cloudflare’s customers from using AEO Suite and Cloudflare’s other products and technology, the timing of when AEO Suite or any of its related features will be generally available to all current and potential Cloudflare customers, the timing of when AEO Suite or any of its related features will be developed and available in beta form, or generally available, to all current and potential Cloudflare customers, Cloudflare’s technological development, future operations, growth, initiatives, or strategies, and comments made by Cloudflare’s Chief Strategy Officer and others. Actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in Cloudflare’s filings with the Securities and Exchange Commission (SEC), including Cloudflare’s Quarterly Report on Form 10-Q filed on May 8, 2026, as well as other filings that Cloudflare may make from time to time with the SEC.
The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Cloudflare undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. Cloudflare may not actually achieve the plans, intentions, or expectations disclosed in Cloudflare’s forward-looking statements, and you should not place undue reliance on Cloudflare’s forward-looking statements.
