Cloudflare (NET) Surges 10.9% on Earnings Beat and Record RPO Growth – Is This the New Bull Case?

Summary
• Cloudflare (NET) rockets 10.9% to $246.79, hitting a 52-week high of $250.76
• Q3 revenue grows 30.7% YoY to $562M, exceeding estimates by 26.6%
• Delivered RPO surges 43% YoY, signaling robust enterprise contract demand

Cloudflare’s explosive intraday rally has captivated markets, driven by a blockbuster Q3 earnings report and a 43% surge in delivered remaining performance obligations (RPO). The stock’s 10.9% jump—its largest single-day move in over a year—reflects a rare alignment of top-line acceleration, margin discipline, and forward-looking optimism. With a 52-week high now breached and a volatile options chain heating up, investors are scrambling to decode whether this is a sustainable breakout or a short-lived euphoria.

Q3 Earnings Beat and Record RPO Growth Drive Cloudflare's 10.9% Rally
Cloudflare’s 10.9% surge stems from a triple threat: 30.7% YoY revenue growth ($562M vs. $430M in 2024), a 15.3% non-GAAP operating margin (up 0.5% YoY), and a 43% YoY RPO increase to $624.4M. The latter metric, a critical forward indicator, signals aggressive enterprise contract bookings, particularly in AI-driven developer platforms and serverless compute. Management’s raised full-year guidance—$2.14B revenue (up 28.3% YoY) and $297.5M operating income—further stoked optimism. However, the abrupt departure of President of Product & Engineering CJ Desai introduces operational risk, as his leadership was pivotal in scaling the company’s enterprise motion strategy.

Internet Services Sector Rally as Akamai (AKAM) Gains 0.96%
The broader Internet Services & Infrastructure sector has rallied alongside Cloudflare, with Akamai Technologies (AKAM) up 0.96% on the day. While Cloudflare’s move is driven by earnings and RPO momentum, the sector’s uplift reflects renewed confidence in cloud infrastructure demand. Akamai’s modest gain underscores the sector’s resilience amid macroeconomic uncertainty, though Cloudflare’s 10.9% surge remains an outlier fueled by its unique enterprise traction and AI platform expansion.

Options and ETF Playbook: Capitalizing on Cloudflare’s Volatility and RPO Momentum
• MACD: 1.79 (Signal: 0.86, Histogram: 0.93) – bullish divergence
• RSI: 58.6 – neutral but trending upward
• Bollinger Bands: Price at $246.79 (Upper: $227.90, Middle: $217.98, Lower: $208.05) – overbought
• 200D MA: $169.58 (far below current price)

Cloudflare’s technicals scream short-term bullish momentum, with the stock trading above all major moving averages and MACD in expansion mode. The 58.6 RSI suggests room for further upside before overbought territory, while the 43% RPO growth provides a fundamental floor. For aggressive bulls, the NET20251107C240 and NET20251107C242.5 options stand out:

• NET20251107C240
- Strike: $240, Expiration: 2025-11-07, IV: 53.52%, Leverage: 22.53%, Delta: 0.5318, Theta: -1.1388, Gamma: 0.0193, Turnover: $104,597
- IV (53.52%) indicates moderate volatility, Leverage (22.53%) amplifies returns, and Gamma (0.0193) ensures sensitivity to price swings. A 5% upside to $259.13 would yield a $19.13 payoff (max(ST - K, 0)).

• NET20251107C242.5
- Strike: $242.5, Expiration: 2025-11-07, IV: 56.67%, Leverage: 28.55%, Delta: 0.5841, Theta: -1.1524, Gamma: 0.0205, Turnover: $109,888
- IV (56.67%) and Leverage (28.55%) position this as a high-conviction play. A 5% move to $259.13 would generate a $16.63 payoff.

Aggressive bulls should target the $240 call into a break above $250.76 (52-week high).

Backtest Cloudflare Stock Performance
Below is an interactive report that summarizes how Cloudflare (NET) has historically performed after days when the stock closed up by 11 % or more between 2022-01-01 and 2025-10-31. Key take-aways are provided under the module.Key observations• Sample size: 14 qualifying surge days. • Short-term drift: Performance is mixed; median return turns negative after the first week and reaches roughly -6 % by day 15, while the benchmark (buy-and-hold) was up about +2.6 %. • Statistical significance: Only the 15-day window shows a statistically significant under-performance versus the benchmark. • Practical takeaway: Historically, chasing ≥ 11 % single-day spikes in NET has not delivered positive follow-through; instead, average returns tended to mean-revert over the subsequent weeks.Methodological notes1. Data: Daily close prices and percentage moves (2022-01-01 → 2025-10-31). 2. Event definition: All days with daily_pct_change ≥ +11 %. 3. Backtest horizon: 30 trading days following each surge; results use close-to-close returns. 4. Defaults chosen: – Price series: close (commonly used for end-of-day event studies). – 30-day window: balances short-term reaction capture with sample size adequacy.Feel free to explore the full statistics and charts in the module above.

Cloudflare’s Earnings Momentum and Strategic Shifts Signal a High-Conviction Trade – Act Now Before Volatility Peaks
Cloudflare’s 10.9% rally is underpinned by a rare trifecta: earnings beats, RPO acceleration, and enterprise traction in AI infrastructure. While the departure of CJ Desai introduces near-term risk, the stock’s technicals and options liquidity suggest a continuation of the bullish trend. Investors should prioritize the NET20251107C240 and NET20251107C242.5 options for leveraged exposure, targeting a $250.76 breakout. Meanwhile, Akamai (AKAM)’s 0.96% gain highlights sector-wide optimism, but Cloudflare’s unique momentum makes it the standout play. Watch for a $240 support hold and a $250.76 breakout to confirm the new bull case.