What Happened?
Shares of cloud security and performance company Cloudflare (NYSE: NET) fell 2.8% in the afternoon session after a broad-based selloff in the technology sector pulled the wider market down from recent highs.
The decline was not driven by company-specific news but rather by a wider market retreat, with the tech-heavy Nasdaq 100 sliding approximately 1.4% and the S&P 500 falling nearly 1%. The negative sentiment in the sector was intensified by disappointing updates from other major technology companies.
For example, Dell Technologies' stock slid on concerns over profit margins, while Marvell Technology issued a revenue outlook that fell short of expectations, raising concerns about its data center business. This broader tech rout weighed on stocks across the industry, including Cloudflare, as investors took profits following a recent rally to record highs.
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What Is The Market Telling Us
Cloudflare’s shares are very volatile and have had 24 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 1 day ago when the stock gained 4.2% on the news that the stock extended its positive momentum as the company announced a new suite of AI security features and integrations aimed at helping businesses safely adopt artificial intelligence. The announcements include the 'Cloudflare Application Confidence Score,' a metric to help organizations assess AI applications, and 'MCP Server Portals' to secure AI connections.
Additionally, Cloudflare integrated its Cloud Access Security Broker (CASB) platform with major generative AI tools like ChatGPT Enterprise, Claude by Anthropic, and Google Gemini. This move allows customers to monitor and control employee AI usage in real-time. By addressing the growing enterprise security concerns surrounding AI adoption, these new capabilities position Cloudflare to capitalize on the increasing integration of AI in the workplace. Strong earnings from cloud peers such as MongoDB and Snowflake are also contributing to the positive momentum.
Cloudflare is up 84.4% since the beginning of the year, and at $207.50 per share, it is trading close to its 52-week high of $215.53 from August 2025. Investors who bought $1,000 worth of Cloudflare’s shares 5 years ago would now be looking at an investment worth $5,423.
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