Cloudflare (NET) stock jumped approximately 5% on Wednesday, April 15, 2026, after Piper Sandler upgraded the company from Neutral to Overweight. The firm set a new price target of $222, representing about 24% upside from the stock's trading level of roughly $178.65 at the time. This upgrade came after NET shares had declined 15.4% over the prior week, which Piper Sandler characterized as a buying opportunity. Despite the recent dip, the stock remained up 64% over the past year.
Piper Sandler's bullish outlook is based on Cloudflare's positioning across multiple growth vectors, including delivery, application security, networking-as-a-service, SASE, infrastructure, and AI-as-a-service. The firm cited early Q1 2026 indicators showing accelerating website growth, rising market share, and strong demand for security and networking products. Revenue growth is projected at approximately 30%, with a gross profit margin of 75%. Piper Sandler forecasts revenue of $2.79 billion for 2026, climbing to $3.6 billion in 2027.
A central pillar of the investment thesis is Cloudflare's expanding role in AI infrastructure and edge computing. The company has direct partnerships with AI leaders OpenAI and Anthropic, positioning it to benefit from growing AI workloads in caching, security, and application delivery. Piper Sandler described Cloudflare's model as a "true platform strategy" where strong large language model relationships are expected to drive compounding growth.
On April 16, 2026, Cloudflare announced a strategic AI security partnership with cybersecurity firm Wiz, which is backed by Google Cloud. The collaboration integrates Cloudflare's AI Security for Apps with Wiz's Security Graph, providing security teams a unified view of AI applications, infrastructure, and associated risks across cloud environments. The system is designed to detect large language model endpoints, monitor for prompt injection attacks, identify potential data leaks, and map data flows without requiring additional agents.
This partnership directly addresses the growing issue of "shadow AI," where developers deploy AI features faster than security teams can evaluate them. The deal gains further strategic weight following Google's $32 billion acquisition of Wiz, one of the largest cybersecurity deals in its history. The integration is multi-cloud compatible, supporting platforms like Amazon Web Services and Microsoft Azure, which aligns with Cloudflare's cross-platform operations.
Cloudflare shares edged higher on the partnership news, reflecting investor confidence in the company's expansion into AI-native security infrastructure. The company has also been active on the product front, recently launching Cloudflare Mesh for private AI networking, expanding its Agent Cloud platform for AI agent deployment, and introducing Dynamic Workers for AI-generated code execution.
While Piper Sandler noted that Cloudflare's valuation remains high relative to peers and that sustaining high-20s growth for multiple years is a requirement, the firm expressed confidence based on RPO growth and coverage ratios. TD Cowen separately maintained its Buy rating on NET with a $265 price target, estimating 30% year-over-year revenue growth for Q1 2026.
