Chip Stock Investor 对 $NET 的判断变化

This is an image from Cloudflare. This is their global network.

And to stay competitive, modern CDNs have progressively added more and more services like cybersecurity or especially in the case of Cloudflare. They've added a lot of AI products as well that are aimed at developers looking to secure their AI workflows or actually build their AI workflows like Cloudflare's Workers platform.

So I started with Cloudflare, then Akamai, and then Fastly, and here they are. We've got some financial breakdowns of each, and this is pretty wild. Cloudflare now trading at over $110 billion market cap, compared to the far older, more mature, and frankly much larger by revenue company, Akamai, at just under $18 billion, and then the small upstart at under $5 billion, Fastly.

Yes, the revenue for Cloudflare is much smaller than Akamai's, but see how they're catching up so quickly. Revenue growth just over the last twelve months at 33.5%. They just reported, Q2 2026, and still north of 30% revenue growth.

So before too long, the market fully expects Cloudflare will far exceed Akamai's revenue because they're growing at a mid-single digit pace.

But you can see, Cloudflare's trajectory as it continues to grow, the gross margin is far higher than its two peers as well. So yes, while GAAP operating margin is negative 14%, most of that is employee stock-based compensation, which is a different risk that needs to be accounted for, especially doing profit on a per share basis to account for dilution.

It's not hard to imagine this company's operating margin eventually far exceeds that of even legacy Akamai. And you can see it already in the free cash flow margin at 14% over the last twelve-month period, 22% for Akamai and Fastly at just shy of 7.5%, though that is also probably going to be improving here, as they pick up some steam again.

So even here, Cloudflare wins plenty of net cash on balance to help them support this very fast pace of revenue growth and what could potentially be a really, really profitable, really lucrative business.

Especially on revenue, this is why the market has valued Cloudflare so high. The expectation is this revenue far exceeds Akamai over the course of the next decade and is robustly profitable, as they've steadily made progress on that front.

So under company analysis, I have Cloudflare pulled up, scroll to the bottom, and we have this financial dashboard. So as of the end of June, the market cap was still at high 80 billion range, which based on the last revenue, we're looking at 30, closer to 40 times price to sales. Price to free cash flow, yes, they are free cash flow positive, but I mean, 250X, not super meaningful.

This is maybe a candidate we would look at trimming if we needed the cash in our portfolio. It's been a pretty fantastic run for Cloudflare since we initially purchased it seven, eight years ago, and we're most definitely interested in still holding onto it.

We do believe that ultimately portfolio allocation, especially centered around secular growth trends, secular growth themes, which next gen CDNs are very much part of that. Upgrading the internet to be able to handle all of this new AI content is certainly, going to be part of that. But the position has obviously outgrown many others and so this would be a candidate for maybe trimming.