Cloudflare Stock Rises on Analyst Optimism, Target Remains Below Current Price

Cloudflare Inc. (NYSE: NET) experienced a notable surge in its stock price, climbing 7.6% to reach $239.54. This upward momentum follows a series of analyst updates and positive financial reports, though some concerns linger about the company's adoption in key sectors.

The stock's performance reflects a market digesting both bullish and cautious perspectives. While Cloudflare has demonstrated strong revenue growth and secured significant contracts, some analysts remain on the sidelines, pointing to specific areas where adoption has not met expectations. The current trading price surpasses the revised price targets from several firms, indicating markets are pricing in future growth beyond analyst expectations.

Scotiabank raised its price target for Cloudflare to $225 from $200, maintaining a “Sector Perform” rating. The firm acknowledges the company's strengths but remains cautious due to limited evidence of Cloudflare's Secure Access Service Edge (SASE) and edge compute adoption based on their CIO/CISO fieldwork. This perspective contrasts with the optimism expressed by other firms.

Mizuho and Morgan Stanley also revised their price targets upward, citing strong demand for cybersecurity and AI solutions. Mizuho increased its target from $155 to $220, while Morgan Stanley raised its target from $150 to $225, emphasizing Cloudflare's innovation and market leadership.

Cloudflare's financial performance in the first quarter of 2025 saw a 27% year-over-year revenue increase to $479.1 million, surpassing consensus estimates. The company also secured its largest-ever contract, exceeding $100 million, driven by its Workers developer platform.

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