Cloudflare stock falls after service outage, JMP maintains rating

Cloudflare Inc . (NYSE:NET) stock fell approximately 5% during Thursday’s trading session following a widespread service outage that began at 1:19 p.m. EDT on June 12. According to InvestingPro data, the company’s stock has shown significant volatility, trading near its 52-week high of $181.81 with a substantial market capitalization of $59.2 billion.

The outage affected numerous Cloudflare sites and services, including Access, Dashboard, Durable Objects, Realtime services, Stream, Waiting Room, WARP, Workers AI, and Workers KV, according to JMP Securities.

JMP analyst Trevor Walsh reiterated a Market Outperform rating on Cloudflare with a price target of $180.00 despite the technical issues that impacted the cloud services provider.

The stock decline came "in light of the incident and the immediate assumption that an internal Cloudflare error (or something worse) was responsible for the outage," Walsh noted in his report.

Cloudflare shares have gained approximately 59% year-to-date, significantly outperforming the Russell 3000 index’s 2.5% increase during the same period, according to JMP’s analysis. InvestingPro data shows an even more impressive one-year return of 132%, though current valuations suggest the stock may be trading above its Fair Value.

In other recent news, Cloudflare announced the pricing of $1.75 billion in convertible senior notes due in 2030. The transaction is expected to generate approximately $1.72 billion in net proceeds after expenses, with the company planning to use these funds for general corporate purposes, including potential strategic transactions. In a related development, Cloudflare has entered into capped call transactions to offset potential dilution from the notes. Additionally, Cloudflare’s shareholders have approved executive pay and re-elected directors during the company’s 2025 Annual Meeting of Stockholders. The meeting also ratified KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. Furthermore, Cloudflare has expanded its partnership with TD SYNNEX (NYSE:SNX) to enhance cybersecurity services across Latin America. This alliance aims to provide a comprehensive suite of security solutions to Managed Security Services Partners in the region. These recent developments highlight Cloudflare’s strategic financial and operational initiatives.

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