Cloudflare Is Riding the AI Wave. Wall Street Is Raising Bets on NET Stock.

Cloudflare (NET) stock is getting a fresh vote of confidence from Wall Street after the company delivered a stronger-than-expected second quarter and raised its full-year outlook. Shares jumped following the report, pushing the stock to record territory as investors digested accelerating growth, stronger customer additions, and rising demand tied to artificial intelligence.

The bigger story is that analysts now see Cloudflare as more than a cybersecurity and content-delivery company. Its network is increasingly becoming infrastructure for the AI-driven internet, giving Wall Street another reason to raise its expectations for NET stock.

NET Stock Is Already Up Big in 2026

Cloudflare shares have already delivered a strong run this year. NET stock is up more than 54% year-to-date (YTD), according to Barchart data, even before accounting for its latest earnings-driven jump.

The recent rally is largely tied to a change in how investors view Cloudflare's exposure to AI.

Earlier concerns centered on whether artificial intelligence could hurt traditional software businesses. Cloudflare is increasingly looking like one of the companies benefiting from that shift instead.

AI workloads require networking, security, developer tools, and infrastructure. Cloudflare provides all four.

That matters because stronger AI adoption could increase traffic moving through Cloudflare's network while creating new opportunities for its Workers and security products.

The AI Traffic Shift Could Change NET's Growth Story

The most important takeaway from the earnings call may have had little to do with quarterly EPS.

CEO Matthew Prince said that, for the first time, more than 50% of the traffic flowing across Cloudflare's network was not human.

That is a major development for the company.

The internet is moving from a world dominated by people clicking websites to one where AI agents increasingly search, communicate, transact, and interact with digital services.

Cloudflare wants to sit in the middle of that transition. If AI agents generate significantly more internet traffic, companies will need infrastructure to authenticate those agents, secure their activity, and control what they can access. Cloudflare is building products around exactly those needs.

That could give NET stock another growth engine beyond its traditional cybersecurity and networking businesses.

Q2 Results Give Analysts More Confidence

Cloudflare's second-quarter numbers strengthened that argument.

Revenue jumped 36% year-over-year (YoY) to $696.1 million, beating Wall Street's estimate of about $665 million. Adjusted earnings came in at 29 cents per share, ahead of expectations for 27 cents. 

The company also added 282 large customers during the quarter. Its total number of customers generating more than $100,000 annually reached 4,698, up 27% from a year earlier.

Dollar-based net retention rose to 120%, suggesting existing customers are spending more with Cloudflare.

Management also raised its outlook. Cloudflare now expects 2026 revenue of $2.864 billion to $2.870 billion, compared with its previous forecast of $2.805 billion to $2.813 billion. Adjusted EPS guidance was lifted to $1.25 to $1.26. 

The company expects third-quarter revenue of $736 million to $737 million, also ahead of Wall Street expectations. 

Wall Street Is Raising NET Stock Price Targets

That is where analysts are becoming more bullish.

Morgan Stanley's Sanjit Singh maintained an “Overweight” rating while raising his price target to $370 from $220. He pointed to sustained current remaining performance obligations growth and broad-based strength as evidence Cloudflare can maintain more than 30% growth for multiple years.

Bank of America also raised its target, moving to $380 from $330 after calling the quarter a standout performance.

Jefferies lifted its target to $350 from $290, arguing that Cloudflare is increasingly an AI beneficiary rather than an AI casualty.

JPMorgan also raised its price target to $350 following the earnings report, citing Cloudflare's strong positioning as AI adoption drives demand for infrastructure. 

Overall, NET stock still has a “Moderate Buy” consensus, and the mean price target of $281.23 implies limited downside of around 6% from here.