Price Data
| Stock |
Price |
1D |
7D |
30D |
3M |
52wkHi |
RSI |
Status |
Action |
| NET |
$173.33 |
+0.9% |
-10.5% |
-8.5% |
— |
-15.9% |
56 |
🟡 Neutral |
🔒 Hold/Watch |
Price vs Last Deep Dive (02/22)
| Metric |
02/22 |
02/26 |
Change |
| Price |
$177.14 |
$173.33 |
-$3.81 (-2.2%) |
| RSI |
49.8 |
55.6 |
+5.8 (RSI rising while price falls — divergence) |
| SMA20 |
$182.31 |
$178.09 |
-$4.22 |
| vs SMA |
-2.8% BELOW |
-2.7% BELOW |
No improvement |
Update from 02/22: NET continued to weaken. Price dropped another -2.2% from $177.14 to $173.33 despite a +0.9% day today. The 7-day move is -10.5% — the second consecutive week of significant selling. Notably, RSI ticked up from 49.8 to 55.6 while the price fell — a mild bearish divergence. The gap below SMA20 remains at -2.7% with no improvement. Stop-loss at $162 is now only -6.5% away. The 30D flipped negative from +4.2% to -8.5% — NET has lost its relative strength advantage completely vs peers. The core thesis (AI traffic layer, zero-trust secular tailwind) remains intact, but price action is deteriorating.
Company Overview
One-Liner
Cloudflare is a cloud network platform providing CDN, DDoS protection, zero-trust security, and serverless computing at the network edge.
Business Model
| Question |
Answer |
| What they sell |
CDN (content delivery), DDoS protection, Zero Trust (SASE), Workers (serverless), R2 (storage) |
| Who pays |
Enterprise, mid-market, developers globally |
| Revenue model |
Tiered SaaS subscriptions; free tier drives enterprise upsell |
| How sticky |
High — network infrastructure is deeply embedded; Zero Trust requires full deployment |
Key Segments
| Segment |
Revenue % |
Growth |
Notes |
| Large Customers ($100K+) |
Growing |
+27% YoY |
3,000+ large customers; primary growth driver |
| Platform Overall |
100% |
+25% YoY |
~$1.6B run rate |
Competitive Analysis
Competitive Moat
| Moat Type |
Present? |
Evidence |
| Network effects |
🟢 |
300+ POPs globally; more traffic = better routing optimization |
| Switching costs |
🟢 |
Zero Trust deployment embedded in enterprise security stack |
| Intangible assets |
🟡 |
Edge network technology; Cloudflare Workers developer ecosystem |
| Cost advantages |
🟡 |
Global network amortized over massive user base |
Moat Width: Narrow (widening)
Moat Trend: Widening — AI agent traffic routing, zero-trust security, R2 storage alternatives to S3
Bull Case
Why This Could Work
- AI traffic layer — Every AI agent call goes through the internet. Cloudflare positioned as the "AI routing layer."
- Zero Trust secular tailwind — Enterprises moving away from VPN → zero trust. NET is the best-positioned pure-play.
- Developer platform — Cloudflare Workers/R2/D1 growing as an alternative to AWS Lambda.
- RSI 55.6 neutral — Not extended; room for recovery.
- $162 stop-loss — Still well-defined risk/reward.
Upside Scenario
| If This Happens |
Stock Could |
| AI agent traffic becomes significant revenue |
$280 (+62%) |
| Zero Trust deal size expansion continues |
$250 (+44%) |
Bear Case
What Could Go Wrong
- Competition from Zscaler / Palo Alto — Both larger zero trust competitors.
- Growth deceleration — 25% is strong but market priced for 30%+.
- -10.5% this week — Persistent selling suggests something structural or fundamental.
- 30D flipped negative — Lost relative strength advantage; now -8.5% 30D.
- Stop-loss proximity — Only -6.5% buffer to $162 stop.
Thesis Killers
- Net Revenue Retention drops below 115%
- Large customer growth stalls
- Security breach damages brand/trust
Entry Strategy
Technical Levels
| Level |
Price |
Notes |
| Support 1 |
$170 |
Round number / prior range floor |
| Support 2 |
$162 |
Stop-loss — CRITICAL LEVEL |
| Resistance 1 |
$178.09 |
SMA20 — needs to reclaim |
| Resistance 2 |
$190 |
Prior week range |
| 52-week high |
$205.95 |
In-window high |
| 52-week low |
~$60 |
Apr 2025 selloff |
Entry Approach
| Strategy |
Details |
| Current hold |
Core position maintained above $162 stop |
| Stop |
$162 — honor if hit, no extensions |
| Re-add |
On reclaim of SMA20 ($178) with RSI holding above 55 |
| New entry |
Wait for either: (1) $162 stop, reset; or (2) SMA reclaim with confirmation |
Research Log
| Date |
Update |
| 2026-02-16 |
Created deep dive. RSI 52.9. $195.85. Only SaaS above SMA (+8.9%). Action: Hold. Strongest in class. |
| 2026-02-22 |
Price refresh. $177.14 (-9.6%). RSI 49.8. NOW BELOW SMA. Today -8.0%. Relative strength advantage LOST. Action: Hold with caution. Monitor $162 stop. |
| 2026-02-26 |
Price further to $173.33 (-2.2% from 02/22). RSI 55.6 (slight rise despite price drop — divergence). 7D -10.5%, 30D flipped to -8.5%. SMA gap still -2.7%. Stop $162 is -6.5% away. Status: Hold tight stop. |
The Gold
Key Discoveries
| Discovery |
Implication |
| Was strongest SaaS (above SMA) on 02/16; now -10.5% week |
Fastest relative strength reversal in our coverage |
| RSI rising (49.8 → 55.6) while price falls (-2.2%) |
Mild bearish divergence — RSI not confirming price weakness |
| 30D flipped from +4.2% to -8.5% |
Relative strength advantage gone; now underperforming |
| Stop $162 is only -6.5% away |
Critical decision approaching — honor the stop |
Open Questions
- What caused the -8.0% single-day drop on 02/22? Was it earnings guide, sector rotation, or something else?
- Is NET being sold by funds rotating out of tech broadly?
- Is the zero trust / SASE competitive landscape shifting?
- Should the stop be tightened from $162 to $165 given continued weakness?
Mistakes (Don't Repeat)
| Mistake |
Lesson |
| Assuming relative strength persists |
Market selloffs eventually hit even the strongest names |
| Watching RSI instead of price trend |
-10.5% week with RSI at 56 = price trend is more important signal |
Sources
- Fundamentals figures: company-reported results (quarterly/annual filings) as available at the artifact date; predates the desk's EDGAR reconciliation gate — figures not re-verified after publication.