Cloudflare (NET) stock returned 87.6% in the nine months to October 7, 2026, significantly outpacing the S&P 500's 13.0% return over the same period. The shares reached a fresh 52-week high of $370.35 on October 6, driven by a series of announcements linking the company to the rise of AI agents and accelerating revenue growth.
Management stated on the August 6 earnings call that automated software, rather than people, sent more than 50% of the traffic on Cloudflare's network in the second quarter of 2026. This marked a first for the company and highlighted the increasing role of AI agents across its platform. On July 1, 2026, the firm introduced new analytics and commercial deals connecting site owners with AI firms, designed for its vision of an agentic internet.
Overall revenue for the second quarter reached $696.1 million, up 36% from a year earlier. While management declined to provide a specific revenue figure for Workers, its platform for software developers, they noted that the platform had become a meaningful contributor to the company's growth. The company's top-line expansion has accelerated over the last twelve months, with revenue reaching $2.5 billion, up from $1.9 billion a year earlier. This represents a 33.5% increase, compared to 27.3% in the prior twelve-month period.
The stock's momentum continued after earnings season. Shares rose about 9% in morning trading on September 9, 2026, following news of a security partnership with OpenAI. Investors treated the tie-in as validation of Cloudflare's positioning with AI agents. The rally was further fueled in early October by a European enterprise expansion deal with Deutsche Telekom and a price-target boost from BTIG to $413. These factors lifted the stock by 21% over the month to October 7, while the S&P 500 gained only 1.8%.
| Metric | Cloudflare (Last 12 Months) | S&P 500 |
|---|---|---|
| Revenue Growth | 33.5% | N/A |
| Operating Margin | -8.1% | 18.5% |
While sales expanded rapidly, the company has not yet achieved profitability. Over the last twelve months, Cloudflare recorded an operating margin of -8.1%, lagging behind the S&P 500's positive margin of 18.5%. The firm has consistently narrowed this deficit, which was 17.7% of revenue three years ago, dropped to 11.6% two years ago, and reached 9.9% a year ago. Gross margin has also declined to 73% over the last twelve months from 76% a year earlier, though management expects it to stabilize around its current level.
Management guided full-year 2026 revenue to a range of $2.864 billion to $2.870 billion, an increase of 32%. Without $151 million of second-quarter restructuring charges, management said the GAAP net loss would have been around $18 million.