Cloudflare Surges to All-Time High After Q2 Beat-and-Raise, Analysts Hail 'Compelling' AI Play

Cloudflare Inc. (NET) shares surged more than 16% in Friday premarket trading after the company delivered a beat-and-raise second quarter, hitting an all-time high as Wall Street increasingly views the infrastructure provider as a key AI beneficiary.

Cloudflare reported earnings per share (EPS) of $0.29 on revenue of $696 million, beating Wall Street estimates of $0.27 EPS on $666 million revenue. Morningstar called the company a "compelling picks-and-shovels play" on AI, citing its edge computing capabilities for lower-latency AI inference. TD Cowen and Barclays both raised price targets to $355 from $300, with TD Cowen noting Cloudflare is "well positioned to play a lead role as AI unfolds." CEO Matthew Prince highlighted that more than half of traffic across Cloudflare's network was non-human for the first time during the quarter, driven by AI agents.