Cloudflare’s Replicate Deal and AI Push Could Be A Game Changer For Cloudflare (NET)

• In recent days, Cloudflare detailed its plan to acquire AI platform Replicate, continued promoting its Workers AI capabilities, and saw President Michelle Zatlyn sell US$15.8 million of stock under a pre-arranged trading plan, while also addressing a global network outage and elevated Workers script errors.
• At the same time, fresh analyst commentary has emphasized Cloudflare’s role in giving Google greater web visibility for AI training, underscoring how the company’s infrastructure and Workers AI platform are increasingly viewed as important plumbing for the broader AI ecosystem.
• With Cloudflare’s Replicate acquisition and expanding AI infrastructure role in focus, we’ll now examine how this news influences its investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

Cloudflare Investment Narrative Recap

To own Cloudflare, you have to believe it can convert its expanding role in internet and AI infrastructure into durable, profitable growth. Near term, the key catalyst is execution around Workers AI and emerging AI-related revenue, while the biggest risk is that rising network complexity and outages undermine confidence in its platform. The latest news, including the Replicate deal and recent network issues, does not materially change that balance but makes operational reliability more central to the story.

Among the recent announcements, the planned acquisition of AI platform Replicate looks most relevant, because it deepens Cloudflare’s ability to host and run AI workloads directly on Workers AI. That fits squarely with the current catalyst around AI adoption, but also raises the execution bar, since investors will be watching closely to see whether Cloudflare can integrate Replicate smoothly, keep service quality high after a global outage, and translate broader AI infrastructure use into meaningful, high margin business over time.

Yet amid Cloudflare’s growing AI ambitions, investors should pay close attention to the risk that repeated outages and elevated Workers errors could...

Read the full narrative on Cloudflare (it's free!)

Cloudflare's narrative projects $3.8 billion revenue and $176.4 million earnings by 2028. This requires 26.5% yearly revenue growth and a $293.5 million earnings increase from -$117.1 million today.

Uncover how Cloudflare's forecasts yield a $242.46 fair value, a 20% upside to its current price.

Exploring Other Perspectives

Twenty eight fair value estimates from the Simply Wall St Community span roughly US$12 to US$242. This spread contrasts with the current focus on Cloudflare’s AI infrastructure catalyst and the execution risk around maintaining network reliability at scale, reminding you to compare many viewpoints before forming expectations.

Explore 28 other fair value estimates on Cloudflare - why the stock might be worth as much as 20% more than the current price!

Build Your Own Cloudflare Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Cloudflare research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
• Our free Cloudflare research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cloudflare's overall financial health at a glance.

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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.

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