Why Cloudflare Rallied Today

Shares of Cloudflare (NYSE: NET) rallied on Wednesday, up 10.5% on the trading day.

While Cloudflare didn't report any company-specific news today, investors may be appreciating it as an ancillary beneficiary of Meta Platforms' (NASDAQ: META) new Muse AI agent.

Muse was introduced late yesterday, and Meta stock is rallying today. However, Cloudflare rallied even more, as it provides low-latency, distributed, secure computing infrastructure and should therefore be an ancillary beneficiary, as it will handle increased edge computing demand from personalized consumer agents going forward.

Cloudflare operates the "pipes" for edge AI

Cloudflare's distributed infrastructure helps consumers route, secure, and optimize web traffic. As such, anything that drives increased web traffic or places a premium on enhancing security for that traffic will benefit Cloudflare.

Yesterday, Meta unveiled Muse, a personalized agent that can securely execute tasks for consumers. It was a big unveiling, with CEO Mark Zuckerberg taking to social media to emphasize Meta's security safeguards around personal data when using the new personal agent.

Muse is built from the ground up for privacy and security. Your data and credentials live on the Muse Secure VM -- an isolated linux computer with a browser, CPU, memory, and storage.

-- Mark Zuckerberg (@finkd) September 8, 2026

Meta has been spending massive amounts on artificial intelligence infrastructure lately, and Muse is its first major AI-first product, aside from the AI improvements to Meta's core Facebook and Instagram social media platforms.

Meta's social media platforms have an enormous 3.6 billion daily active users. Needless to say, if even a small portion of those users begin using highly personalized Muse agents to execute day-to-day tasks across the web, that should greatly increase web traffic. That means more and more business for Cloudflare.

Cloudflare had already partnered with Meta on AI as far back as 2025, when Meta deployed its Llama open-source model across Cloudflare's Workers AI platform, which enables local inference for AI developers. Last quarter, Cloudflare's CEO, Matthew Prince, noted that, for the first time in its history, over 50% of the traffic on Cloudflare's network was non-human, agentic traffic. Cloudflare also recently announced Wallet, which enables trusted and secure commerce transactions between agents and merchants. It appears Muse will likely make extensive use of these capabilities.

Image source: Getty Images.

Cloudflare is an all-star growth stock

Cloudflare appears to be firing on all cylinders now, having successfully pivoted from the internet era to the AI era, with early investments in edge GPU computing and security.

Cloudflare's stock does look extremely expensive, trading around 40 times sales and 114 times this year's forward earnings estimates. Nevertheless, Cloudflare has always "looked" expensive, but has nevertheless been a long-term outperformer. The stock should be on the watch list for every tech-focused growth investor, at a minimum.

Billy Duberstein and/or his clients have positions in Meta Platforms. The Motley Fool has positions in and recommends Cloudflare and Meta Platforms. The Motley Fool has a disclosure policy.