To The Moon

Time to talk about $Cloudflare, Inc.(NET)$, the digital equivalent of an all-seeing, all-protecting guardian at the internet’s gates. From security to speed to seamless infrastructure, they’re building something that goes far beyond a simple CDN or firewall. After a deep dive into their operations, financials, and future prospects, I’m convinced Cloudflare isn’t just a solid investment—it’s a foundational piece of the internet itself.

A Digital Moat Built at the Edge

Cloudflare’s strength lies in its vast edge network—an interconnected web of global servers that keeps content and security solutions close to end users. The result? Lower latency, faster speeds, and cost savings for customers. This isn’t just technical jargon; it’s a real competitive advantage in a world where milliseconds can make or break user experience.

Cloudflare's edge network: The Internet's neural system

But here’s the kicker: they’re not just resting on their infrastructure. AI is quietly becoming Cloudflare’s secret weapon, dynamically optimising network performance and predicting cyber threats before they emerge. It’s like having an ultra-intelligent digital concierge, handling performance and security issues before they even register as a problem. This kind of forward-thinking innovation puts them in a league above traditional cloud providers who rely on more centralised models.

Cybersecurity: Cloudflare’s Unshakable Stronghold

In an era where cyber threats are evolving faster than a cryptocurrency bull run, security is no longer optional—it’s essential. $Cloudflare, Inc.(NET)$ is doubling down on its role as a cybersecurity leader, offering an integrated suite of solutions that range from DDoS mitigation to Zero Trust frameworks. This approach not only attracts enterprise-level clients but also makes robust security accessible for small and mid-sized businesses.

And the numbers back this up. The count of customers generating over $100,000 in annualised revenue has surged from 2,042 in 2022 to 3,497 in 2024, reflecting strong adoption across industries. With cybersecurity projected to become a multi-trillion-pound industry in the coming years, Cloudflare is poised to capture a significant share of this ever-growing demand.

Beyond protection: Cloudflare's expanding digital universe

Beyond Security: Cloudflare’s Silent Expansion into Full-Stack Domination

While many view Cloudflare as a cybersecurity giant, its ambitions extend far beyond protection. Their push into non-security services, including R2 storage (a challenger to Amazon S3 but without the dreaded egress fees) and Pages (a high-performance web hosting solution), is a strategic play to cement Cloudflare as a full-stack internet infrastructure provider.

This diversification strategy is already paying off. Revenue has climbed to $1.7 billion in 2024, marking a 28.8% year-over-year increase, while free cash flow has surged to $167 million—an impressive 40% jump from the previous year. By reducing dependence on any single revenue stream, Cloudflare is not just surviving in a competitive landscape—it’s thriving.

Growth on autopilot: Cloudflare’s revenue and margins surge

The Overlooked Catalyst: Developers and Data Supremacy

Here’s something that doesn’t get enough attention: Cloudflare’s deep-rooted relationship with developers. The company has fostered a thriving ecosystem, offering powerful APIs, developer-friendly tools, and a frictionless deployment experience. This keeps developers engaged and, more importantly, creates an organic growth loop where $Cloudflare, Inc.(NET)$ becomes the default infrastructure of choice for new applications.

But there’s another underappreciated asset: data. With their expansive global network, Cloudflare has an unmatched vantage point into internet traffic patterns, security threats, and performance bottlenecks. This wealth of data not only enhances their existing services but also provides invaluable insights that can drive future product development. In short, Cloudflare isn’t just selling services—they’re building a knowledge empire.

What’s Next? A Market Ripe for the Taking

Cloudflare’s trajectory remains highly compelling. With a total addressable market projected to hit $222 billion by 2027, there’s still plenty of runway for expansion. Their aggressive investment in R&D, strategic partnerships, and scaling of sales teams indicate a company that isn’t just chasing growth—it’s engineering it.

Financially, they’re making all the right moves. Gross margins have climbed to 77.3%, and the one-year target price of $144.02 seems well within reach. More importantly, Cloudflare is laying the groundwork for a much larger long-term opportunity, leveraging its infrastructure, security, and developer ecosystem to entrench itself even deeper into the internet’s core functionality.

Exceeding expectations: Cloudflare’s EPS keeps outpacing forecasts

Final Verdict: A Strong ‘Buy’ for the Digital Age

Cloudflare’s ability to innovate, expand, and integrate across multiple facets of the internet makes it a compelling investment. This isn’t just another cloud company—it’s an internet backbone in the making. With strong financials, a competitive edge in AI and edge computing, and a rapidly growing cybersecurity footprint, $Cloudflare, Inc.(NET)$ is positioning itself as an indispensable force in the digital era.

For investors looking for a high-growth, high-conviction stock that blends security, speed, and scale, Cloudflare remains a top-tier bet. In a world increasingly reliant on seamless, secure connectivity, investing in Cloudflare isn’t just smart—it’s practically inevitable.

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