What Happened?
Shares of cloud security and performance company Cloudflare (NYSE:NET) jumped 4.2% in the afternoon session after 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.
After the initial pop the shares cooled down to $214.99, up 4.9% from previous close.
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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 9 days ago when the stock dropped 3.8% on the news that investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week. The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Cloudflare is up 91% since the beginning of the year, and at $214.99 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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