This article first appeared on GuruFocus .
Cloudflare ( NYSE:NET ) shares jumped 10.9% to $271.15 at 9:35 a.m. ET on Friday, November 6, after the network security and edge-computing company posted third-quarter revenue of $782.5 million, up 39% from a year earlier. Growth is accelerating at a time when investors are punishing software names that look like AI losers. Cloudflare just made the opposite case.
The details back it up. Non-GAAP operating income reached $137.1 million, a 17.5% margin versus 15.3% a year ago, and free cash flow came in at $82.1 million. Current remaining performance obligations rose 37%, a sign that booked business is keeping pace with revenue. Cloudflare guided fourth-quarter revenue to $845 million to $846 million and full-year 2026 revenue to $2.963 billion to $2.964 billion, with non-GAAP EPS of $1.35. On a GAAP basis, the company still lost money from operations.
The GuruFocus chart shows a GF Score of 78/100, with Growth and Momentum stretching toward the edge, while Profitability and Financial Strength stay tight to the center. Shares sit about 37% above a GF Value of $198.03, so the rally leaves little room for error. The fourth-quarter guide implies about 8% sequential growth; hitting that while widening margins is the next hurdle.
