Cloudflare stock surges to all-time record on Q2 earnings beat

Cloudflare (NYSE: NET) shares surged roughly 16% to an all-time high after the company reported strong second-quarter earnings and raised its full-year outlook.

Investors are increasingly confident that the network firm can successfully turn the explosion of automated web traffic into long-term growth.

How did Cloudflare reach a new share price record? 

Cloudflare’s revenue for the quarter hit $696.1 million, a 36% profit from 2025 that easily beat Wall Street’s expectations. Adjusted earnings also topped consensus estimates at $0.29 a share.

The company’s forward guidance gave it an even bigger boost. Cloudflare raised its full-year revenue expectation to around $2.87 billion, placing it comfortably ahead of analyst models, while also pushing its projected annual earnings upward.

Where the growth is coming from

Executives tied the quarter to demand from AI systems reshaping how the web is used. Customers spending more than $100,000 a year rose 27% from a year earlier to 4,698, and dollar-based net retention improved to 120%, according to reports, a sign existing accounts are spending more. 

Current remaining performance obligations, a gauge of contracted revenue coming due, grew 35% year over year.

Cloudflare’s Workers platform, which lets developers run code on its network, was the fastest-growing part of the business, Morgan Stanley analysts told Reuters, as the company leans toward charging customers by how much they consume.

A wider loss under the record

During the earnings call, executives leaned heavily into the AI narrative, sharing that machine-generated traffic recently overtook human traffic on their network for the first time. CFO Thomas Seifert even predicted that non-human traffic could eventually eclipse human web usage by a thousand-fold.

The CEO, Matthew Prince also took a swipe at bigger tech competitors spending billions on hardware, contrasting their heavy capital expenditures with Cloudflare’s asset-light, serverless network model.

“Humans will be a rounding error”

Executives spent much of the earnings call on Thursday selling the AI story. CFO Thomas Seifert told analysts that if current trends hold, non-human traffic could reach “as much as 1,000 times as much as human traffic” within five years. 

“Humans will be a rounding error on the internet,” he said, adding that machine-generated traffic overtook human traffic on Cloudflare’s network back in May 2026. Prince said non-human traffic had crossed 50% of the total for the first time, per TradingPedia.

Prince also used the company’s low planned capital spending, which Seifert put at 14% to 15% of forecast revenue, or about $430 million, to jab at larger rivals. 

“If you’re basically letting an AI company use your balance sheet and your credit rating in order to buy servers that are the same as everybody else’s servers, then that’s just not attractive business for us,” Prince said, according to The Register, contrasting Cloudflare’s serverless model with the hyperscalers spending far more on GPUs.

What Wall Street did with it

The earnings report prompted multiple major financial firms to start hiking their price targets, pushing Cloudflare shares up nearly 70% this year. 

While a few analysts remained cautious with neutral ratings, the overwhelming market enthusiasm highlights a major win for the network security giant.

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