Cloudflare Stock Soars on Goldman Sachs Upgrade

Cloudflare Inc (NET) stock is trading upwards today after receiving a double upgrade to 'Buy' from 'Sell' by Goldman Sachs analyst Gabriela Borges. The analyst raised the price target from $77 to $140, reflecting a jump in the multiple from 11x to 20x (Q5-Q8 revenue). Borges cited two key catalysts for Cloudflare stock in 2025: an improving sales and marketing productivity cycle and traction with Act III products for developer services.



Cloudflare's platform strategy and sales productivity cycle are driving its stock upgrade. Borges believes that the market's perception of Cloudflare as a platform rather than a point product is a significant driver of its stock performance. In 2024, security stock performance was almost entirely explained by this factor. Borges expects an improving sales and marketing productivity cycle for Cloudflare in 2025, as the company evolves to better address platform sales in the enterprise. This evolution is likely to lead to better traction with Act III products for developer services, as Cloudflare applies its core edge network architecture advantages to new AI inferencing use cases.

The price target boost reflects a jump in the multiple from 11x to 20x (Q5-Q8 revenue), raising the analyst's 2026 revenue estimates by 2%. Borges' views on sales productivity and Act III products contributed to this increase. Borges also raised his EPS estimates for 2024, 2025, and 2026, driven by slightly more margin expansion, marking the highest target multiple in his coverage.

Cloudflare's platform strategy differentiates it from point product competitors by offering a comprehensive, integrated solution that addresses multiple aspects of internet security and performance. This strategy enables Cloudflare to penetrate adjacent markets and expand its total addressable market, which is projected to increase from $176 billion in 2024 to $222 billion by 2027.

In conclusion, Cloudflare's stock upgrade by Goldman Sachs analyst Gabriela Borges reflects the company's strong platform strategy and improving sales productivity cycle. With an increased price target and higher EPS estimates, investors should consider Cloudflare as a promising investment opportunity in the cloud security and performance sector.