Key Points
Cloudflare's sales are surging.
Management expects solid growth in 2026.
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Shares of Cloudflare (NYSE: NET) popped on Wednesday after the connectivity provider issued an upbeat forecast for the year ahead.
As of 2:05 p.m. EST, Cloudflare's stock price was up more than 5% after rising as much as 13% earlier in the day.
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AI-driven gains
Cloudflare's revenue surged 34% year over year to $614.5 million in the fourth quarter. Growing adoption of artificial intelligence (AI)-powered applications fueled the gains.
"The shift toward AI and agents represents a fundamental replatforming of the Internet that's driving demand across Cloudflare's services," CEO Matthew Prince said in a press release.
Cloudflare is particularly well-positioned to profit from the expected boom in agentic AI.
"If agents are the new users of the web, Cloudflare is the platform they run on and the network they pass through," Prince said. "This creates a virtuous flywheel: more agents drive more code to Cloudflare Workers, which fuels demand for our performance, security, and networking services."
All told, Cloudflare's adjusted net income soared 55% to $106.8 million, or $0.28 per share. That was slightly above Wall Street's estimates, which had called for adjusted per-share profits of $0.27.
A bullish forecast for 2026
Looking ahead, Cloudflare expects revenue to grow by roughly 29% to $2.79 billion in 2026. Management also projects adjusted earnings per share of $1.12, up from $0.93 in 2025.
Prince's confidence in the company's AI-driven future is clear. "We were built for this moment and the rise of the Agentic Internet," he said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cloudflare. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
