NET
The setup got pricey
Cloudflare has had one of those chart lines that makes you squint and wonder if your browser glitched. The stock is up more than 90% since a late-2024 Buy call, but the thesis has matured faster than the valuation bargain bin.
Why investors should care
The business still looks strong, and near-term catalysts like Q1 results and Investor Day could keep the mood upbeat if cRPO, large-customer growth, and AI tooling stay hot. But when a stock’s run has already done half the work for you, you start needing a lot more from the next leg.
Translation: great company, tougher trade
This is the classic “quality isn’t the issue, price is” problem. The call is now Hold because the margin of safety has shrunk and there are better upside setups elsewhere.
- cRPO trends still matter as a signal for future demand
- Large-customer growth can keep the growth story credible
- AI products are the shiny new object investors want to see stick
Big picture: Cloudflare can absolutely keep winning — the question is whether the stock can still make you money at this altitude without first taking a scenic detour downward.