Cloudflare Shares Dip 1.68% on $610M Turnover as Market Activity Ranks 163rd Amid AI Infrastructure Uncertainty

Cloudflare (NET) closed at a 1.68% decline on August 20, 2025, with a trading volume of $610 million, ranking 163rd in market activity. The stock experienced heightened volatility, trading between $195.50 and $187.28 intra-day as options volume surged to 649,380 shares, reflecting speculative positioning amid sector-wide uncertainty in AI infrastructure.

The selloff aligns with broader skepticism over near-term ROI for cloud providers, exacerbated by conflicting signals in AI adoption. While Zipline AI secured $7 million in seed funding for open-source tools, Unisys’ report revealing a 42% gap between AI spending plans and operational readiness has intensified concerns about execution risks. This divergence has prompted investors to reassess valuations for companies lacking proven AI scalability.

Technical indicators suggest mixed signals for short-term traders. The stock traded near its 30-day moving average of $197.38, with RSI at 46.77 indicating neutral momentum. Bollinger Bands showed price proximity to the lower band at $187.89, highlighting defensive positioning. Key options contracts like the $185 put and $197.5 call reflect market anticipation of potential breakouts or breakdowns in the $185–$197.5 range.

Backtesting results for a 1-day trading strategy involving the top 500 stocks by volume from 2022 to present show a 0.98% average daily return and cumulative 31.52% total return over 365 days. While capturing some short-term momentum, the strategy underperformed the 84.13% benchmark return during a 4% intraday plunge, with a Sharpe ratio of 0 and maximum drawdown of 4% underscoring its risk profile.