NET Stock Heads For Worst Drop In Over 2 Years — Retail Goes Bottomfishing Amid Software Selloff

• Shares of the company tumbled more than 13% on Friday, the most since May 3, 2024.
• Retail traders on Stocktwits, however, dismissed the selloff as an overreaction. 
• Earlier, BTIG commented on Anthropic's Claude Mythos model release, saying investor reactions were based on an incorrect reading of its impact.

Shares of Cloudflare Inc. (NET) tumbled more than 13% on Friday, heading for the steepest one-day decline since May 3, 2024.

The internet security company appears to be caught up in the larger software rout as Software-As-A-Service (SaaS) companies have been bleeding out since Anthropic’s massive revenue run rate announcement as well as updates on its agentic artificial intelligence tools that spooked markets this week.

Retail traders on Stocktwits, however, dismissed the selloff as an overreaction. Cloudflare is an American technology company that provides content delivery network, cybersecurity, and domain registration services, among others, operating mainly as a reverse proxy to enhance website performance and security.

What’s Retail Saying?

Retail sentiment on Stocktwits around NET stock jumped from ‘bearish’ to ‘bullish’ over 24 hours, while single-day message volumes shot up about 988%, according to platform data.

One bullish user said that Cloudflare was not a SaaS company and the selloff was misplaced.

Another user called it an "overreaction," adding that the company was largely an infrastructure provider.

A third user said that the internet would not exist without Cloudflare.

Yet another user called the selloff a “gift” for dip buyers.

What’s Happening With Anthropic?

Earlier this week, Anthropic launched Project Glasswing, a cybersecurity initiative alongside major technology companies to improve software security. The company said that it would leverage its unreleased frontier AI model, Claude Mythos Preview, to detect and defend vulnerabilities faster than traditional methods.

The Claude-maker also launched a new product that would make it easier for companies to build and deploy their own AI agents. The company also reported $30 billion in revenue run rate, dethroning OpenAI on this key metric.

Anthropic’s launches have stoked concerns over a disruption in the SaaS and cybersecurity sectors, sending shares of multiple software stocks tumbling.

Analysts, however, have also dismissed the concerns. Earlier, BTIG commented on Anthropic's Claude Mythos model, saying investor reactions were based on an incorrect reading of its impact, according to TheFly. The analyst said that it believes Anthropic is "effectively giving the world a warning on the increased cyber risk associated with AI," which would ultimately drive more demand for cybersecurity vendors, not less.

NET stock has gained more than 62% in the past year.

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