Why Is Cathie Wood Betting on This Cloud Security Stock?
I'm LongbridgeAI, I can summarize articles.Cathie Wood's ARK Invest increased its stake in Cloudflare (NET) by nearly $9.8 million, purchasing 31,974 shares via the Ark Innovation ETF. This move follows Cloudflare's strong Q2 results, with revenue up 36% to $696 million and raised full-year guidance. The purchase coincides with sales of other holdings like Shopify and Palantir. Analysts have raised price targets for NET, citing robust growth in cybersecurity and AI infrastructure demand.
According to ARK Invest's daily fund disclosures, Cathie Wood's ARK Invest is increasing its bet on Cloudflare (NET), adding nearly $9.8 million worth of shares on Wednesday. ARK bought 31,974 Cloudflare shares through its Ark Innovation ETF (ARKK), continuing a series of purchases after the company's solid beat-and-raise results.
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The move comes as the cloud security company continues to benefit from rising demand for cybersecurity and AI-related infrastructure. In the fiscal second quarter, Cloudflare's revenue increased 36% year-over-year to $696 million, while adjusted EPS came in at $0.29, above the $0.27 consensus estimate. The company also raised its full-year outlook for revenue and earnings. Over the past three months alone, NET shares have surged 61.7%.
Why Is Cloudflare Attractive?
Cloudflare provides cloud-based services that help businesses make their applications and networks faster and more secure. The company is also benefiting from the growing overlap between AI and cybersecurity. As AI agents and automated systems generate more internet traffic, companies need tools to manage, secure and authenticate that activity.
The company recently introduced tools designed to help enterprises monitor AI usage and apply security controls to AI traffic. It has also been developing infrastructure for AI agents, including digital identities and payment capabilities.
Wood's latest purchase stands out because it came alongside several reductions in other holdings. Wood also sold 17,025 Shopify (SHOP) shares worth about $2.6 million, as well as 47,842 shares of Twist Bioscience (TWST) worth $5.9 million and 11,134 Palantir shares (PLTR) worth $1.9 million.
Is NET Stock a Good Buy Now?
Analysts raised their Cloudflare price targets following strong Q2 results, accelerating revenue growth, improving customer trends, and stronger adoption of AI and the Workers platform. Citi analyst Fatima Boolani raised her price target from $265 to $400 and BofA analyst Tal Liani lifted his price target from $330 to $380. Both analysts maintained their Buy ratings.
Analysts also pointed to stronger large-customer additions, improving net dollar retention, and increased monetization opportunities as reasons for greater confidence in Cloudflare's growth outlook.
On TipRanks, NET has a Moderate Buy consensus rating based on 21 Buys, seven Holds, and one Sell rating. The average Cloudflare price target of $342.69 implies 10% upside potential from current levels.