Do You Believe in the Strong Fundamentals of Cloudflare (NET)?

In its second-quarter 2025 investor letter, Baron Global Advantage Fund highlighted stocks such as Cloudflare, Inc. (NYSE:NET). Cloudflare, Inc. (NYSE:NET) is a cloud services provider that delivers a range of services to businesses worldwide. The one-month return of Cloudflare, Inc. (NYSE:NET) was 8.29%, and its shares gained 173.87% of their value over the last 52 weeks. On August 4, 2025, Cloudflare, Inc. (NYSE:NET) stock closed at $208.80 per share, with a market capitalization of $72.763 billion.

Baron Global Advantage Fund stated the following regarding Cloudflare, Inc. (NYSE:NET) in its second quarter 2025 investor letter:

"Twenty of our investments posted quarterly gains of over 20%, while Cloudflare, Inc. (NYSE:NET), NVIDIA, Snowflake, Zscaler, CrowdStrike, and indie Semiconductor appreciated over 40% each. The shares of Cloudflare had a maximum drawdown of 45% during the first half, while we believe the intrinsic value of the business has only grown. Cloudflare is rapidly becoming a more important vendor for its customers with $1 million and $5 million customers growing 48% and 54% year-over-year, respectively, while the company also booked a milestone contract of over $130 million during the quarter. The company is seeing strong early success with its AI offering enabling customers to run AI models on top of Cloudflare’s global network. Cloudflare has a strategic advantage in having its network closer to end consumers, reducing latency which is critical for AI inferencing. Cloudflare Workers AI inference requests were up “nearly 4,000% year-on-year.” While the stock is expensive by any measure, we continue to believe that Cloudflare is an important company whose fundamentals continue to get stronger.