[NicoJuicy]

Really?

Cloudflare isn't solely a CDN anymore. CDN and DDOS-protection were the most logical "first" products to build based on their SDN ( Software Defined Networking).

A cloud is the next thing and there's a lot of money involved with the cloud. I see them as the only real competitor/challenger to Azure, AWS, GCE, ... because they aren't bound to regions ( less DevOps)

For example, what you might not know about Durable Objects => https://boristane.com/blog/what-are-cloudflare-durable-objec...

[redwood]

I'm not saying they're not an interesting company I'm just reflecting on their extraordinary valuation multiple which puts them in a unique league that are predominantly AI bets. Their founder is uniquely strong storyteller. If you look at their capital investment it's just not anywhere close to a top tier cloud player.. so while they offer some interesting building blocks it's just not clear that large workloads move there anytime soon

(https://substackcdn.com/image/fetch/$s_!-PwA!,f_auto,q_auto:...)

[NicoJuicy]

Cloudflare went x 10 since their IPO 6 years ago ( stocks).

Revenue:

$ 85 million (2016)

$ 287 million (2019) IPO year

$ 1,670 million (2024)

$ 2,154 million (2025)

https://www.macrotrends.net/stocks/charts/NET/cloudflare/rev...

That's not a crazy valuation multiple considering their growth.

Palentir is a body shop. Cloudflare is infrastructure/cloud. Very big difference ( at least to me)

Stock ( Cloudflare - https://finance.yahoo.com/quote/NET/holders/ ): 90.87% % of Shares Held by Institutions

Stock ( Palantir - https://finance.yahoo.com/quote/PLTR/holders/): 60.09% % of Shares Held by Institutions

[redwood]

It's not a question of crazy or not, it's just an extreme end of the multiple spectrum.. and the company is not in a positive operating margin position. So you're right they have a strong track record and there's optimism they turn a profit, but it's highly speculative. Nothing wrong with that. Just makes sense they are fleshing out their AI story while they're in a position to invest with equity IMO

[NicoJuicy]

Their not investing with equity. Cloudflare is cash flow positive and re-investing.

[redwood]

Well I'd assume the acquisition is with equity and that much of their employee compensation comes from equity, neither of which show up in a free cash flow view. Still you do make a good point. I'd have expected bigger capital costs that even if amortized would show up on cash flow some of the time.. but they appear to run a very tight capex ship. So more security SaaS than cloud provider IMO