TLDR
- Shares of Cloudflare experienced a remarkable 10%+ surge on September 9, fueled by Meta’s introduction of the Muse AI agent
- The Muse platform is projected to substantially boost agentic web traffic, creating significant opportunities for Cloudflare’s edge network
- On September 3, Cloudflare unveiled an AI-enhanced security solution powered by OpenAI’s GPT-5.6 Cyber model
- Second quarter revenue reached $696.1 million, representing 35.9% growth compared to the prior year, while adjusted EPS of $0.29 exceeded expectations
- The company increased its full-year financial outlook based on robust quarterly performance
Cloudflare (NET) shares experienced a powerful rally on September 9, climbing more than 10% to reach $314.18. Market participants viewed the company as a primary beneficiary following Meta Platforms’ introduction of its Muse personalized AI agent.
On September 8, Meta CEO Mark Zuckerberg unveiled Muse, an AI agent engineered to handle routine consumer tasks securely within an isolated Linux environment featuring dedicated browser access, CPU allocation, memory resources, and storage capacity.
With Meta’s ecosystem reaching 3.6 billion daily active users, even modest adoption rates for Muse could generate substantial increases in web traffic. Cloudflare’s infrastructure is strategically positioned to capture this expanding demand.
The company maintains distributed edge infrastructure that handles routing, security, and optimization for web traffic globally. An uptick in agentic activity translates directly into heightened demand for Cloudflare’s core services.
The partnership between these tech giants has precedent. In 2025, Meta integrated its Llama open-source model with Cloudflare’s Workers AI platform to enable localized AI inference capabilities.
During the previous quarter’s earnings call, Cloudflare CEO Matthew Prince revealed a significant milestone: non-human, agentic traffic accounted for more than 50% of network activity for the first time ever. This percentage appears poised for further expansion.
Additionally, Cloudflare recently introduced Wallet, a solution designed to facilitate secure commercial transactions between AI agents and merchants. Muse is anticipated to leverage this functionality.
OpenAI Partnership Adds Another Catalyst
Beyond the Muse-driven momentum, Cloudflare gained additional tailwinds this week. The company announced on September 3 the launch of “Vulnerability Discovery and Remediation,” an advanced feature within its Managed Defense offering.
This innovation harnesses OpenAI’s GPT-5.6 Cyber model to autonomously identify, verify, and recommend solutions for software vulnerabilities. The system performs codebase analysis while incorporating real-time traffic intelligence from Cloudflare’s worldwide network, enabling automated deployment of custom firewall rules and generation of code patches for development teams.
Strong Financials Back the Momentum
Cloudflare’s second quarter performance reinforced investor optimism. The company generated $696.1 million in revenue, marking a 35.9% year-over-year increase. Adjusted earnings per share of $0.29 surpassed analyst projections. Billings expanded 34.8% to reach $753.5 million.
While GAAP operating margins faced headwinds from a non-recurring impairment charge, the underlying business demonstrated strong momentum.
Following these impressive results, management upgraded its full-year revenue and adjusted EPS projections.
Year-to-date, the stock has appreciated 59.1% and approached its 52-week peak of $332.22 prior to the trading session.
Trading at approximately 40 times sales and 114 times forward earnings, the valuation remains elevated. However, Cloudflare has historically commanded premium multiples throughout its tenure as a publicly-traded entity.
While Cloudflare has recorded 35 moves exceeding 5% over the past year, a single-day gain of 10% represents an exceptional occurrence even for this volatile stock.
With shares priced at $314.18, the stock is hovering near its 52-week high of $332.22.
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