Cloudflare shares (NET) soared over 16% in pre-market trading on Friday after the company delivered second-quarter revenue that exceeded analyst expectations and lifted its full-year outlook, driven by accelerating demand for AI infrastructure and cybersecurity. Revenue for the quarter reached $696.1 million, up 36% year-over-year, beating the consensus estimate of roughly $665 million. Adjusted earnings per share came in at $0.29, topping the projected $0.27.
CEO Matthew Prince highlighted a historic milestone: for the first time, non-human AI agent traffic accounted for more than half of total network traffic. "This is a fundamental rewrite of the internet," Prince stated, emphasizing Cloudflare's critical role in powering what he termed the "agentic internet." The Workers developer platform, which enables AI inference at the edge, continued to scale rapidly, with developer numbers climbing to 7.4 million from 4.5 million in December.
Buoyed by the strong performance, management raised full-year 2026 revenue guidance to $2.864–$2.870 billion, up from the prior range and ahead of the $2.81 billion analyst consensus. The company also boosted its adjusted EPS forecast to $1.25–$1.26, well above expectations. Analysts reacted positively: TD Cowen and Barclays both lifted their price targets to $355 from $300. The stock touched $329.46 pre-market, shattering its previous 52-week high.
The broader market barely moved—the Nasdaq eked out a 0.5% gain—making it clear that Cloudflare's rally was entirely a reflection of its own AI-driven momentum and enterprise security demand. The large-customer segment grew 27% year-over-year, and dollar-based net retention improved to 120%, underscoring the company's deepening moat in a rapidly expanding AI infrastructure market.
