Cloudflare, Inc.
Information Technology · Systems Software
Structural: Cloudflare is the neutral edge layer for the post-hyperscaler internet. ~20% of HTTP requests traverse its network - that footprint is now monetized three ways: legacy CDN/security, Zero Trust replacing $ZS/legacy VPN stacks, and Workers AI running inference at the edge on $NVDA GPUs in 330+ POPs.
The bet is that latency-sensitive AI workloads route through edge networks, not hyperscaler regions.
- Workers + R2 + D1 stack pulling developer mindshare against $AMZN AWS Lambda + S3
- Zero Trust ARR compounding 40%+, displacing legacy SSE incumbents
- Workers AI puts GPU inference within 50ms of 95% of internet users - neutral arms-dealer to AI app builders
- $100k+ ARR customer count growing 25%+ YoY, NRR ~115%
- Optionality on tokenized payments + AI agent infrastructure (agent-native HTTP standards)
- Trading 18x forward sales - priced for sustained 28%+ growth
- Gross margin (~77%) under pressure as GPU-heavy Workers AI ramps
- $MSFT + $AMZN bundling edge + security free-tier into hyperscaler deals
- $NET historically guides conservatively but operating margin still single-digit
- Cybersecurity TAM contested by $CRWD + $ZS + $PANW platform consolidation
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