BofA kept a bet on Cloudflare shares despite global disruption

Shares of hosting provider Cloudflare, through whose network passes about 20% of global web traffic, did not lose attractiveness for Bank of America after the large-scale failure. One of the largest Wall Street banks recognizes the potential reputational risks for Cloudflare, but believes that the negative effect of the incident will be minimal.

Following the November 18 security breach at Cloudflare, which caused the global Internet to freeze for several hours, BofA analyst Tomer Silberman reiterated a Buy rating on the company's stock and a target price of $255 per share, which he set in late October. Silberman said the incident could pose "some reputational risk" for Cloudflare, but is unlikely to be a lingering problem, Seeking Alpha reported.

"Cloudflare's recent outage reflects the inherent risk of reliance on large infrastructure providers: it follows outages of Amazon Web Services and Azure last month," Silberman reminded clients. "We await further clarification from the company on the outage, but believe the long-term impact of the incident will remain limited," the BofA analyst said.

Silberman emphasized that Cloudflare's products still enjoy high customer loyalty ("remain sticky"), and the costs of switching to other providers appear significant. Nevertheless, the analyst acknowledged that compensation and discounts could create short-term pressure on performance while the company works to rebuild trust in the reliability of the service. Despite this, BofA maintained Cloudflare's revenue growth forecasts of 31% and 29% year-over-year for the fourth quarter of 2025 and first quarter of 2026, respectively - above Wall Street's expectations (28% for both quarters).

Wall Street remains steadily optimistic about Cloudflare. According to FactSet, over the last three months the number of analysts recommending the provider's securities to buy - with Buy or Overweight ratings - has not changed (19). At the same time, the camp of skeptics has thinned: the number of recommendations to hold (Hold) decreased from 14 to 13, to sell (Underweight and Sell) - from 3 to 2, which strengthened the consensus forecast at the level of "above the market" (Overweight). Most experts see the potential for a rally: the average target price of $245 per share implies a 24% year-over-year increase in Cloudflare's quotations.

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