Is Cloudflare, Inc. (NET) A Good Stock To Buy Now?

Is NET a good stock to buy? We came across a bullish thesis on Cloudflare, Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on NET. Cloudflare, Inc.'s share was trading at $209.22 as of May 27 th . NET’s forward P/E was 178.57 according to Yahoo Finance. Photo by Caspar Camille Rubin on Unsplash Cloudflare is a global cloud infrastructure and cybersecurity company positioned at the center of edge computing, Zero Trust security, and AI-native networking. The company continues to demonstrate strong execution with revenue growth accelerating to 33.6% YoY, RPO up 47.9%, net dollar retention improving to 120%, and record net new ARR growth of 76% YoY, reflecting expanding customer adoption and deeper platform penetration. Read More: 15 AI Stocks That Are Quietly Making Investors Rich Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential CAC payback improved to 15.3 months while sales productivity reached new highs, indicating improving go-to-market efficiency. Demand is increasingly driven by high-growth segments including Workers AI, Zero Trust, and developer platform services, with AI agent traffic reportedly more than doubling, reinforcing early exposure to the emerging agentic web. Cloudflare’s moat is supported by global scale across 330+ cities, strong network effects from 215B daily cyber threats blocked, and high switching costs from multi-product adoption across CDN, security, and compute. Large customer momentum remains robust with over 4,298 customers spending above $100K annually and rising enterprise deal sizes. TAM expansion to $196B and beyond supports a long runway. Financially, gross margins remain near 75% with improving free cash flow margins at 16.2%, despite continued heavy reinvestment in R&D and AI infrastructure. While valuation remains elevated at ~26.9x EV/Sales and ~192x forward earnings, reflecting a premium to peers, it is supported by strong growth, improving unit economics, and category leadership in AI-enabled infrastructure. Overall, Cloudflare presents a structurally compounding growth story with durable secular tailwinds and expanding AI-driven optionality, positioning it as a long-term winner in next-generation internet infrastructure. Previously, we covered a bullish thesis on Cloudflare, Inc. (NET) by Oliver | MMMT Wealth in April 2025, which highlighted scaling network effects, profitability inflection, and expansion across security and developer services. NET’s stock price has appreciated by approximately 95.88% since our coverage. Sergey shares a similar view but emphasizes stronger recent execution, accelerating AI-driven demand, and improving unit economics driven by RPO and NDR expansion. Cloudflare, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds . As per our database, 84 hedge fund portfolios held NET at the end of the first quarter which was 70 in the previous quarter. While we acknowledge the risk and potential of NET as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NET and that has 10,000% upside potential, check out our report about this cheapest AI stock .