Cloudflare (NET) Surges 4.05% on Strategic Oracle Partnership and AI-Driven Expansion – What’s Next?

Summary
• Cloudflare (NET) jumps 4.05% to $222.49, hitting an intraday high of $223.70.
• Partnership with Oracle Cloud Infrastructure and new solution bundles drive momentum.
• Stock trades near 52-week high of $230.10 amid AI infrastructure tailwinds.

Cloudflare’s sharp intraday rally reflects renewed investor confidence in its AI-driven security and performance solutions. The stock’s 4.05% surge, fueled by strategic partnerships and product innovations, positions it as a key player in the evolving cloud ecosystem. With the Internet Services sector showing strength, traders are scrutinizing technical levels and options activity to gauge sustainability.
Oracle Integration and AI Bundles Drive Cloudflare’s Rally
Cloudflare’s 4.05% intraday surge stems from two pivotal announcements: a partnership with Oracle Cloud Infrastructure (OCI) and the launch of new solution bundles for its channel business. The integration of Cloudflare’s Connectivity Cloud platform with OCI enables joint customers to deploy security and performance services natively, accelerating application performance across hybrid cloud environments. Simultaneously, the new solution bundles simplify partner delivery of security and application management, reducing complexity for businesses. These moves align with the company’s AI infrastructure strategy, as highlighted in its recent press releases, and signal growing demand for unified cloud-native security tools.

Internet Services Sector Gains Momentum as Amazon Leads with 1.94% Rally
The Internet Services sector, led by Amazon (AMZN) with a 1.94% intraday gain, reflects broader optimism in cloud infrastructure and AI adoption. While Cloudflare’s rally is driven by partnership-driven growth, Amazon’s performance underscores sector-wide tailwinds from enterprise demand for scalable cloud solutions. The sector’s resilience contrasts with recent volatility, as investors balance AI optimism against macroeconomic concerns like the U.S. government shutdown and AI margin pressures.

Options and ETFs to Watch: Capitalizing on Cloudflare’s AI-Driven Momentum
• 200-day average: 162.18 (well above); RSI: 37.08 (oversold); MACD: 1.61 (bullish divergence).
• Bollinger Bands: Price at 222.49 near upper band (228.33), suggesting overbought conditions.

Cloudflare’s technicals present a mixed picture: RSI at 37.08 indicates oversold conditions, while the MACD histogram (-1.06) hints at short-term bearish momentum. However, the stock’s proximity to its 52-week high and AI-driven fundamentals suggest a potential breakout. Traders should monitor the 219.85 (middle Bollinger Band) and 217.90 (30D support) as critical levels.

Top Options Picks:
• NET20251017C225 (Call, $225 strike, 2025-10-17):
- IV: 58.36% (high volatility)
- Leverage Ratio: 46.36% (moderate)
- Delta: 0.4407 (moderate sensitivity)
- Theta: -1.3522 (rapid time decay)
- Gamma: 0.0260 (high sensitivity to price swings)
- Turnover: 99,303 (liquid)
This contract offers a balance of leverage and liquidity, ideal for a 5% upside scenario (targeting $233.61).
• NET20251017C227.5 (Call, $227.5 strike, 2025-10-17):
- IV: 58.52% (high volatility)
- Leverage Ratio: 57.68% (aggressive)
- Delta: 0.3783 (moderate sensitivity)
- Theta: -1.2276 (rapid time decay)
- Gamma: 0.0250 (high sensitivity to price swings)
- Turnover: 26,197 (liquid)
This option’s high leverage ratio and moderate delta make it a compelling play if Cloudflare breaks above $223.70, with a 5% upside payoff of $245.12.

Action Insight: Aggressive bulls may consider NET20251017C225 into a breakout above $223.70, while NET20251017C227.5 offers higher leverage for a sustained rally.

Backtest Cloudflare Stock Performance
Below is the interactive back-test report for the “RSI Oversold – 1-Day Hold” strategy on NVDA (2022-01-01 → 2025-10-13). Feel free to explore the module for full details on the entry criteria, risk parameters and performance metrics.Key observations (not duplicated inside the module):• The strategy produced a cumulative return of 29.7% with an annualised 8.0%, while max drawdown stayed below 13%. • Average winning trade (+3.8%) slightly outweighed the average loss (-3.5%), yielding a Sharpe ratio of 0.53. Let me know if you’d like to adjust holding days, thresholds or add further risk controls for comparison.

Cloudflare’s AI-Driven Momentum: A High-Volatility Play with Clear Catalysts
Cloudflare’s 4.05% rally, driven by Oracle integration and AI-focused product launches, underscores its position as a key player in the cloud infrastructure arms race. While technical indicators suggest a potential overbought condition, the stock’s alignment with AI infrastructure trends and sector strength (Amazon up 1.94%) supports further upside. Traders should watch the 223.70 intraday high as a critical resistance level and consider the NET20251017C225 and NET20251017C227.5 options for leveraged exposure. A breakdown below 219.85 could trigger short-term profit-taking, but the long-term bullish case remains intact for investors betting on AI-driven cloud adoption.