What Happened?
Shares of internet security and content delivery network Cloudflare (NYSE: NET) jumped 5.1% in the afternoon session after Oppenheimer raised the firm's price target from $165 to $200 and kept a Buy rating following talks with Phil Winslow, Cloudflare's VP of Strategic Finance & Investor Relations.
The firm expressed growing confidence in Cloudflare's long-term growth trajectory, particularly in its Secure Access Service Edge (SASE) offerings. It cited a number of growth catalysts, including accelerating adoption of Cloudflare's Wide Area Network (WAN) solutions and continued enhancements in its security stack, specifically in Cloud Access Security Broker (CASB) and Data Loss Prevention (DLP) tools.
Contributing to the momentum, peer MongoDB reported strong first-quarter 2025 earnings, which confirmed that demand for cloud software is healthy, especially because MDB is a consumption model, so demand weakness shows up quite quickly.
After the initial pop the shares cooled down to $179.19, up 4.9% from previous close.
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What The Market Is Telling Us
Cloudflare’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 24 days ago when the stock gained 7% on the news that the major indices popped (Nasdaq +3.4%, S&P 500 +2.5%) in response to the positive outcome of U.S.-China trade negotiations, as both sides agreed to pause some tariffs for 90 days, signaling a potential turning point in ongoing tensions.
This rollback cuts U.S. tariffs on Chinese goods to 30% and Chinese tariffs on U.S. imports to 10%, giving companies breathing room to reset inventories and supply chains.
However, President Trump clarified that tariffs could go "substantially higher" if a full deal with China wasn't reached during the 90-day pause, but not all the way back to the previous levels. Still, the agreement has cooled fears of a prolonged trade war, helping stabilize expectations for global growth and trade flows and fueling renewed optimism.
The optimism appeared concentrated in key trade-sensitive sectors, particularly technology, retail, and industrials, as lower tariffs reduce cost pressures and restore cross-border demand.
Cloudflare is up 59.2% since the beginning of the year, and at $179.19 per share, has set a new 52-week high. Investors who bought $1,000 worth of Cloudflare’s shares 5 years ago would now be looking at an investment worth $6,149.
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