NET Stock Heads Toward An All-Time High After Beat-And-Raise Q2 — Wall Street Calls Cloudflare A 'Compelling Picks-And-Shovels Play' On AI

• Morningstar said Cloudflare's consumption-based business model is benefiting from increased AI spending.
• The firm added that Cloudflare’s expanding mix of security, edge computing and AI infrastructure offerings, along with a growing enterprise customer base, strengthens its long-term positioning.
• Cloudflare CEO Matthew Prince also said more than half of the traffic flowing across the company’s network was non-human for the first time during the quarter.

Shares of Cloudflare Inc. (NET) were on track to hit a fresh all-time high after the company delivered a beat-and-raise second quarter (Q2), with Wall Street increasingly viewing the internet infrastructure provider as one of the leading beneficiaries of the AI buildout.

Cloudflare reported earnings per share (EPS) of $0.29 on revenue of $696 million, beating Wall Street estimates of an EPS of $0.27 on revenue of $666 million, according to Fiscal.ai data.

Cloudflare shares were up more than 16% in Friday’s pre-market trade. NET was among the top trending tickers on Stocktwits at the time of writing.

NET Is A ‘Compelling Picks-And-Shovels Play’ On AI, Says Morningstar

Morningstar said Cloudflare is a “compelling picks-and-shovels play” on AI adoption, citing its ability to run inference workloads at the edge. The firm said the company’s distributed network positions it to benefit as enterprises look for lower-latency and more cost-efficient alternatives to centralized cloud AI processing.

The firm also said Cloudflare's consumption-based business model is benefiting from increased AI spending. It noted that the company's Workers platform continues to gain traction, with the number of developers building on Workers increasing to 7.4 million from 4.5 million in December. Morningstar added that channel partner sales grew 67% during the quarter and now account for 31% of total revenue, reflecting stronger enterprise demand.

It said the company's expanding mix of security, edge computing and AI infrastructure offerings, along with a growing enterprise customer base, strengthens its long-term positioning.

Wall Street Sees More Upside For NET Stock

According to TheFly, TD Cowen raised its price target on Cloudflare to $355 from $300 and maintained its ‘Buy’ rating, saying that the company set records for year-over-year net additions across all large customer tiers and large contracts.

TD Cowen added that Cloudflare is “well positioned to play a lead role as AI unfolds.”

Barclays also raised its price target to $355 from $300 while reiterating its ‘Overweight’ rating. The firm pointed to accelerating revenue growth during the quarter, saying the results reinforced Cloudflare's growth trajectory.

NET CEO Says The ‘Agentic Future Needs A New Kind Of Cloud’

Cloudflare CEO Matthew Prince said during a post-earnings call with analysts that the company’s business momentum continued to accelerate during Q2, pointing to record additions of large customers, faster pipeline generation, growing developer adoption and increasing 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,” he said.

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 interact 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 raised its fiscal year 2026 EPS forecast to $1.25 to $1.26 from $1.19 to $1.20, and revenue to $2.86 billion to $2.87 billion from $2.80 billion to $2.81 billion. Wall Street expects Cloudflare to report an EPS of $1.2 on revenue of $2.81 billion.

What Retail Investors Think Of NET Stock

Retail sentiment on Stocktwits around Cloudflare trended in the ‘extremely bullish’ territory, with message volumes at ‘high’ levels at the time of writing.

NET stock is up 44% year-to-date and 32% over the past 12 months. The Vanguard Total Stock Market Index Fund ETF (VTI) is up 22% over the past 12 months, while the Vanguard Information Technology Index Fund ETF (VGT) is up 38%.

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