Despite Valuation Concerns, Cloudflare (NET) Still Offers Strong Upside

Cloudflare Inc. (NYSE:NET) is among the best bundle infrastructure stocks to bargain according to hedge funds. In a mid-December report, Stifel reiterated its affirmative presumption connected Cloudflare Inc. (NYSE:NET) amid AI-driven information requirements becoming much cardinal to endeavor hazard management.

The steadfast highlighted that organizations are expanding the usage of generative and agentic AI. This enlargement would mean cybersecurity teams volition progressively absorption connected controlling however AI is accessed and utilized internally, peculiarly to mitigate risks of unauthorized access, information leakage, and compromised AI outputs. This will, successful turn, summation the request for Identity, Data, Cloud, and Zero Trust Security solutions. Stifel’s expert believes that Buy-rated Cloudflare Inc. (NYSE:NET) volition beryllium a beneficiary of these trends wrong its sum universe.

Cloudflare Inc. (NYSE:NET) banal has performed powerfully successful 2025, delivering much than 80% returns arsenic of January 7. Despite that beardown performance, expert statement inactive indicates a 28% upside, with astir 60% of analysts covering it assigning it a Buy oregon equivalent rating.

However, existent valuation is simply a interest for immoderate analysts, including those astatine Piper Sandler, who reiterated their Neutral standing connected the banal this week. They besides factored successful a little price-to-sales multiple, which resulted successful a little terms people of $220, down from $249. While inactive seeing Cloudflare Inc. (NYSE:NET) arsenic a best-in-class infrastructure company, the analysts said that the valuation reasonably reflects astir of its maturation prospects.

Cloudflare Inc. (NYSE:NET) is simply a planetary unreality services supplier offering a scope of services, including contented transportation network, cybersecurity, and DDoS mitigation.

While we admit the imaginable of NET arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you’re looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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Disclosure: None. This nonfiction is primitively published astatine Insider Monkey.