Cloudflare, Inc. (NET): A Bull Case Theory

Cloudflare, Inc. operates arsenic a unreality services supplier that delivers a scope of services to businesses worldwide. NET delivered a beardown Q3 2025 show with $562 cardinal successful revenue, increasing 31% twelvemonth implicit twelvemonth and 10% sequentially, supported by robust billings, grounds nett caller ARR, and a 42% surge successful RPO to $2.14 billion. Dollar-based nett retention roseate to 119%, reflecting deeper multi-product adoption crossed its expanding endeavor basal of astir 296,000 customers, including much than 4,000 ample accounts.

Profitability improved with a 15.3% operating borderline and a 13.3% escaped currency travel margin, adjacent arsenic gross borderline compressed to 75.3% owed to higher AI-related postulation and merchandise mix. Management emphasized improving gross quality, rising multi-year commitments, and beardown income productivity, supported by a rapidly scaling spouse ecosystem that is doubling bookings and accelerating SASE adoption. Workers AI continued to grow arsenic GPU utilization climbed toward 70–80%, positioning Cloudflare arsenic an borderline inference person for apical AI firms seeking little latency and amended outgo ratio than centralized hyperscaler clusters.

Zero Trust and SASE maintained beardown momentum, with customers consolidating bequest tools onto Cloudflare One, portion R2 Storage and the D1 database gained traction arsenic enterprises adopted multi-cloud architectures and built stateful AI applications astatine the edge. Strategic partnerships with Visa, Mastercard, American Express, Coinbase, and Oracle reinforced Cloudflare’s relation successful defining unafraid AI interactions and emerging agentic-web monetization models.

Large endeavor wins, including multimillion-dollar deals with media, fintech, and authorities agencies, showcased the platform’s breadth and consolidation advantages. Despite short-term gross-margin pressure, dilution risk, and enactment transition, Cloudflare raised full-year guidance and reiterated semipermanent targets, underscoring assurance successful durable growth, expanding AI monetization, and a way toward a $5 cardinal gross tally complaint by 2028.

Previously we covered a bullish thesis connected Cloudflare, Inc. (NET) by Oliver | MMMT Wealth successful April 2025, which highlighted its beardown web effects, sustained 20%+ growth, and an approaching profitability inflection point. The company’s banal terms has appreciated astir by 87.44% since our coverage. This is due to the fact that the thesis played out. The thesis inactive stands arsenic execution remains robust. The latest writer shares a akin presumption but emphasizes Cloudflare’s accelerating endeavor and AI-driven momentum.