Why NET Stock Could Be the Most Interesting Bet in Cybersecurity Right Now

The NET stock chart appears to be a study in controlled chaos from the outside. Over the course of a year, Cloudflare’s shares have fluctuated between $89.42, which at the time had investors genuinely wondering if the company’s aspirations had finally outpaced its execution, and $260 before returning to a volatile middle ground around $210. The stock opened at $216 on Thursday, March 26, and briefly rose to $220 before closing slightly above $210, down 3.6% for the day. That type of intraday whipsaw is essentially weather for a company with a beta of 2.23. What transpired today is not the question worth posing. The question is whether any of the daily fluctuations reveal anything significant about what Cloudflare is genuinely developing.

The San Francisco-based business that Matthew Prince and Michelle Zatlyn co-founded in 2010 began as a tool to help websites load more quickly and fend off denial-of-service attacks. By 2026 standards, that origin story may seem modest, but it was the kind of patient infrastructure work that accumulates over time. With a global network spanning about 330 cities, Cloudflare is now at the center of how a significant portion of the internet’s traffic flows and is protected. The company has quietly grown from its roots in content delivery to include cloud security, AI-assisted threat detection, zero-trust architecture, and developer tools. Revenue for the fourth quarter of 2025 was $614.51 million, up 33.6% from the previous year, continuing an incredibly steady growth trajectory for a business that faces competitors ten times its size.

Nevertheless, Cloudflare declared a $102.27 million net loss for 2025. The NET stock story revolves around this tension, which is why the valuation debate is so intense. Cloudflare is expected to turn a profit within three years, according to Simply Wall Street’s analysis of the stock this week. During that time, revenue is predicted to grow at a rate of 19.5% annually, which would significantly outpace the larger U.S. market. When a company makes aggressive investments in a market where it has genuine competitive advantages and trades at a price that reflects future profitability rather than current losses, investors find that timeline credible. Skeptical investors see $73 billion in market capitalization linked to a company that continues to spend more than it makes, has no dividend, no trailing P/E, and significant exposure to whatever the larger Nasdaq chooses to do on any given day.

However, there is a developing business case that is heavily related to AI. The recent collaboration between Cloudflare and SentinelOne to offer AI-driven security solutions is the kind of calculated move that perfectly aligns with the requirements of the AI infrastructure build-out: quick, dispersed security at the network edge. The attack surface increases as more businesses implement AI systems in production settings; Cloudflare’s network is positioned to sit between the attack surface and the systems it is defending. This week, an article in Investor’s Business Daily suggested that the company is “poised to surge” as a result of its AI endeavors. Although language like that always warrants skepticism, the underlying reasoning is sound. The issue is timing, and in the tech industry, timing is infamously difficult to predict.

It’s difficult to ignore the fact that Cloudflare frequently comes up in discussions about the AI infrastructure stack—not as the most conspicuous name in the room, but rather as something more akin to crucial plumbing. Regardless of which AI model prevails in the capability race, Cloudflare’s edge network may prove to be infrastructure that people need, much like AWS proved to be more significant than anyone first thought. That type of value proposition is more akin to betting on the traffic itself than it is on a particular product or technology. Additionally, historically, traffic has continued to increase.

However, the risk picture is truthful. The average price target of 37 analysts for NET is $233.76, which suggests some upside from current levels. However, the stock has traded above and through this target in the last year, and the StockGrader rating is currently downgraded from hold to sell. There are currently 8.22 million shares of short interest. High-beta tech companies like Cloudflare bear a disproportionate amount of the pressure as the Nasdaq as a whole is in correction territory, down more than 10% from its peak. Cloudflare wasn’t the main cause of Thursday’s 3.6% decline; instead, it was caused by oil rising above $100, rising yields, and a general Nasdaq sell-off. It just so happened that Cloudflare was in the way.

If the profitability timeline is maintained, there is a version of this story that appears to be very clean in three years. Revenue is increasing at a rate of almost 20% per year, demand for AI security is rising, the network is genuinely hard to duplicate, and there is a path to profits that would cover the current multiple and more. There is also a version in which the premium embedded in NET stock contracts, the path to profitability gets farther off, and macro conditions continue to be difficult. Both are viable options. Investors can learn a lot about which version they are truly in by watching how the upcoming earnings reports turn out.