Cloudflare (NYSE:NET) Shares Down 5.5% – Time to Sell?

Shares of Cloudflare, Inc. (NYSE:NET) fell 5.5% on Wednesday . The company traded as low as $194.16 and last traded at $194.5510. 2,347,362 shares traded hands during trading, a decline of 37% from the average session volume of 3,712,588 shares. The stock had previously closed at $205.95.

Key Cloudflare News

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Viral AI agent (“Clawdbot”) running on Cloudflare infrastructure rekindled investor excitement about Cloudflare’s platform for hosting and routing AI agents, sparking a sizeable premarket rally and heavy media attention. Cloudflare surges as viral AI agent buzz lifts expectations
• Positive Sentiment: Coverage frames AI agents and edge computing as a structural growth opportunity for Cloudflare, arguing the company’s edge network and developer tools make it well‑positioned to capture AI inference and agent workloads. Cloudflare (NET) Stock: Why AI Agents Are Driving This Rally
• Positive Sentiment: Analysts and commentators point to improving fundamentals — accelerating revenue, recent earnings beats, partnerships and more optimistic sell‑side outlooks — as justification for a higher multiple and medium‑term growth thesis. What’s Fueling The Growth For Cloudflare Stock?
• Positive Sentiment: Unusual bullish options activity—about 13,069 call contracts traded (roughly 43% above typical daily call volume)—indicates some traders were positioning for further upside during the viral-news window.
• Neutral Sentiment: Some brokers are conflicted: while a portion of the street is upgrading expectations on AI-driven adoption, others caution valuations and execution risks mean opinions remain mixed. Analysts Conflicted on These Technology Names: CoreWeave (CRWV) and Cloudflare (NET)
• Negative Sentiment: Market commentators warn the price jump may be driven by social‑media momentum rather than durable fundamentals; note that recent estimate revisions may not sustain further immediate upside. Cloudflare (NET) Moves 9.2% Higher: Will This Strength Last?
• Negative Sentiment: After the spike in attention and volume, intraday profit‑taking and rotation out of high‑beta, AI‑momentum names is pressuring the stock; this increases short‑term volatility risk for investors.

Analysts Set New Price Targets

Several brokerages recently commented on NET. Royal Bank Of Canada reiterated an “outperform” rating on shares of Cloudflare in a research note on Tuesday. Guggenheim reaffirmed a “sell” rating on shares of Cloudflare in a report on Tuesday, October 21st. Susquehanna boosted their price target on Cloudflare from $205.00 to $260.00 and gave the stock a “neutral” rating in a research note on Monday, November 3rd. Jefferies Financial Group reaffirmed a “hold” rating and issued a $225.00 price objective on shares of Cloudflare in a research note on Tuesday, December 16th. Finally, Cantor Fitzgerald lifted their price objective on Cloudflare from $199.00 to $224.00 and gave the stock a “neutral” rating in a report on Friday, October 31st. One investment analyst has rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating, ten have assigned a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $232.48.

Cloudflare Trading Down 9.8%

The company has a quick ratio of 2.04, a current ratio of 2.04 and a debt-to-equity ratio of 1.46. The firm has a market cap of $65.06 billion, a P/E ratio of -617.72, a price-to-earnings-growth ratio of 124.54 and a beta of 1.96. The business’s 50 day moving average is $195.16 and its 200-day moving average is $206.17.

Cloudflare (NYSE:NET) last released its quarterly earnings results on Thursday, October 30th. The company reported $0.27 earnings per share for the quarter, beating analysts’ consensus estimates of $0.23 by $0.04. Cloudflare had a negative return on equity of 6.54% and a negative net margin of 5.12%.The company had revenue of $562.03 million for the quarter, compared to analysts’ expectations of $544.65 million. During the same quarter in the previous year, the company posted $0.20 earnings per share. The business’s revenue for the quarter was up 30.7% compared to the same quarter last year. Cloudflare has set its Q4 2025 guidance at 0.270-0.270 EPS and its FY 2025 guidance at 0.910-0.910 EPS. As a group, analysts forecast that Cloudflare, Inc. will post -0.11 earnings per share for the current fiscal year.

Insider Buying and Selling

In related news, Director Carl Ledbetter sold 6,134 shares of the company’s stock in a transaction dated Monday, January 5th. The stock was sold at an average price of $198.26, for a total value of $1,216,126.84. Following the completion of the sale, the director owned 968,073 shares in the company, valued at approximately $191,930,152.98. This represents a 0.63% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this link. Also, Director John Graham-Cumming sold 2,520 shares of the company’s stock in a transaction on Monday, January 5th. The shares were sold at an average price of $200.27, for a total transaction of $504,680.40. Following the completion of the sale, the director owned 495,191 shares of the company’s stock, valued at approximately $99,171,901.57. This represents a 0.51% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 619,213 shares of company stock valued at $122,370,244 in the last ninety days. Company insiders own 10.89% of the company’s stock.

Institutional Investors Weigh In On Cloudflare

Several large investors have recently made changes to their positions in the stock. Norges Bank bought a new stake in Cloudflare during the second quarter worth $541,462,000. Groupama Asset Managment acquired a new position in shares of Cloudflare during the 2nd quarter worth about $225,204,000. Vanguard Group Inc. increased its stake in shares of Cloudflare by 2.6% during the 3rd quarter. Vanguard Group Inc. now owns 32,317,249 shares of the company’s stock worth $6,934,958,000 after purchasing an additional 821,684 shares during the last quarter. KBC Group NV raised its holdings in shares of Cloudflare by 1,388.7% in the 2nd quarter. KBC Group NV now owns 736,153 shares of the company’s stock valued at $144,161,000 after purchasing an additional 686,702 shares during the period. Finally, Rakuten Investment Management Inc. acquired a new stake in Cloudflare in the 3rd quarter valued at about $138,660,000. Institutional investors own 82.68% of the company’s stock.

About Cloudflare

Cloudflare, Inc is a global web infrastructure and security company that provides a suite of services designed to improve the performance, reliability and security of internet properties. Its core offerings include a content delivery network (CDN), distributed denial-of-service (DDoS) protection, managed DNS, and a web application firewall (WAF). Cloudflare also provides tools for bot management, SSL/TLS, load balancing and rate limiting to help organizations maintain uptime and protect web applications from attack.

In addition to traditional edge and security services, Cloudflare has expanded into edge computing and developer platforms.