Cloudflare AI Push Faces Valuation Concerns And Recent Share Weakness

• Cloudflare (NYSE:NET) has acquired the Astro web framework team to expand tools for content creators and developers.
• The company has also acquired Human Native, an AI data marketplace, to strengthen its AI-focused offerings.
• Cloudflare has expanded its partnership with JD Cloud with a goal of reducing AI latency by up to 80% for customers.

Cloudflare runs a global cloud platform that helps developers and businesses deliver content and applications closer to users. With AI workloads growing, the company is moving deeper into tools that help developers build, deploy, and scale AI driven services. The latest acquisitions and partnership updates fit into that push toward more data, faster inference, and support for modern web apps.

For investors, these moves matter because they extend what Cloudflare can offer to AI builders and content creators directly on its network. A key consideration is how effectively the company can translate these product expansions into broader customer adoption and usage over time, especially as demand for AI infrastructure and data tooling continues to evolve.

Stay updated on the most important news stories for Cloudflare by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Cloudflare.

How Cloudflare stacks up against its biggest competitors

Quick Assessment

• ❌ Price vs Analyst Target: At US$173.30, Cloudflare trades below the US$231.95 analyst target, which implies potential upside but also a wide target range from US$117 to US$300.
• ❌ Simply Wall St Valuation: The stock is flagged as overvalued, trading about 101% above Simply Wall St's estimated fair value.
• ❌ Recent Momentum: The 30 day return is about a 14.2% decline, indicating recent weakness despite the AI focused news.

Check out Simply Wall St's in depth valuation analysis for Cloudflare.

Key Considerations

• 📊 The Astro and Human Native deals plus the JD Cloud expansion broaden Cloudflare's AI and developer toolkit, which could influence how customers use its network over time.
• 📊 It may be useful to monitor how AI related products affect revenue, margin trends and usage metrics, especially with the current P/E ratio reflecting a loss making position and a high industry P/E benchmark of about 27.6.
• ⚠️ One flagged risk is significant insider selling in the past 3 months, which some investors may weigh more heavily when the shares are assessed as overvalued.

Dig Deeper

For the full picture including more risks and potential rewards, check out the complete Cloudflare analysis.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com