Cloudflare will benefit from a 'dead internet', say analysts. Is it worth buying shares

Network services provider and cybersecurity service owner Cloudflare could acquire a key role in a "dead internet" that will be dominated by artificial intelligence, analysts suggested. The company's shares were up 14% at the moment in trading on Feb. 11 after it beat earnings forecasts last quarter and gave a full-year revenue outlook better than Wall Street's expectations. AI activity on the Internet is improving Cloudflare's financial performance, Barron's stated.

The "dead internet" theory - is the hypothesis that the World Wide Web is already dominated by artificial intelligence or will be in the near future. This could be great news for Cloudflare because of its role in global network design, Barron's writes, citing analysts.

"With approximately 20% of global internet traffic passing through Cloudflare's infrastructure, we see the company as an increasingly promising candidate to serve as a 'dashboard' for large-scale, non-human interactions," Truist Securities analyst Junaid Siddiqui wrote in a note cited by Barron's. Siddiqui reiterated a "buy" recommendation on the stock (Buy rating) and a target price of $225. That's 19% above the closing price on Feb. 11.

Shares of Cloudflare were up 5.2% in Wednesday trading, though the price was up nearly 14% to $203.62 during the day. Quotes jumped sharply after a quarterly report that emphasized Cloudflare's role in an AI-related future, Barron's said. In the fourth quarter of 2025, Cloudflare's revenue rose 34% from the same period in 2024 to $614.5 million. Analysts polled by LSEG expected $591 million, CNBC writes. Adjusted earnings totaled $0.28 per share versus Wall Street's forecast of $0.27.

Cloudflare said it expects earnings per share of $1.11 to $1.12 and revenue of $2.785 billion to $2.795 billion in 2026. Analysts had forecast earnings of $1.18 per share and revenue of $2.73 billion, CNBC noted.

"If AI agents are becoming the new users of the internet, then Cloudflare is the platform on which they operate and the network through which they pass," Cloudflare CEO Matthew Prince said in a call with analysts after the publication of the statements, he was quoted by CNBC. According to the top executive, Cloudflare is benefiting from a "fundamental restructuring" of the internet.

Last month, the viral rise in popularity of Moltbot, an open-source personal assistant based on Anthropic's Claude model, pushed Cloudflare's stock up: the company's network edge infrastructure and security platform proved effective for running such agents, CNBC writes. Cloudflare later released its own Moltworker platform specifically designed to run Moltbot securely.

"The continued proliferation of AI agents plays into the hands of Cloudflare and its Workers platform, as such agents require low latency, secure inferencing (end-user output. - Oninvest) capable of scaling up and down, and proximity to the user - that is, placement at the 'periphery' of the network," analysts at RBC Capital Markets wrote in January.

"The company is turning Cloudflare Workers' increased use of its AI platform, increased web traffic and larger deals into significant revenue growth," Barron's quoted William Blair analyst Jonathan Ho as saying. - Cloudflare is capturing significant traffic growth from its customers because AI is able to search and process data on far more sites than is available in traditional human-powered search." Ho reiterated an Outperform rating ("above market") without specifying a target price.

Cloudflare shares are now 4% cheaper than they were at the beginning of 2026. Most analysts advise buying the company's securities: they have a combined 21 Buy and Outperform ratings versus ten Hold (recommendation to hold) and two Sell ("sell"), MarketWatch shows. The average target price of $239.7 implies a 26% increase in quotes.

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