Cloudflare surges on viral AI agent infrastructure demand
Moltbot drives developer adoption as cybersecurity firm expands AI positioning
Cloudflare shares surged 11.6% to $211.38 on Tuesday, adding $22.03 in value as viral excitement around a new artificial intelligence agent drove unprecedented trading volume and renewed investor enthusiasm for the company's infrastructure capabilities.
The rally, which saw trading volume reach more than three times the daily average, was triggered by social media buzz surrounding Moltbot, an AI agent formerly known as Clawdbot that has rapidly gained popularity among developers. The open-source project, which leverages Anthropic's Claude model to automate tasks, generate code, and manage workflows, has attracted thousands of GitHub stars and trended online over the weekend, signaling growing interest in "agentic" AI systems that can execute autonomous tasks.
Developers building with Moltbot are increasingly turning to Cloudflare's globally distributed edge network to connect securely with the agent and run it locally on devices. The company's low-latency infrastructure and consumption-based pricing model have positioned it as a natural choice for scaling these emerging AI applications.
"As agentic tools like Moltbot scale—making more API calls, hitting more websites, generating more traffic—we believe NET is positioned to capture that activity," Joshua Tilton, an analyst at Wolfe Research, noted in a recent report. The viral success of projects like Moltbot suggests that AI agents are progressing beyond demonstrations toward real-world applications, a development that analysts expect could fuel the next phase of the AI rally.
Cloudflare has been aggressively positioning itself as critical infrastructure for the AI boom. Chief Executive Matthew Prince stated in October that an estimated 80% of leading AI companies already rely on its infrastructure. "The agents of the future will inherently have to pass through our network and abide by its rules," Prince said, highlighting the company's strategic advantage in the evolving AI landscape.
The San Francisco-based company has expanded its AI capabilities through a series of strategic initiatives. In April 2025, Cloudflare introduced new offerings to accelerate AI agent development, including the industry's first remote Model Context Protocol (MCP) server, generally available access to Durable Workflows, and a free tier for Durable Objects. These tools aim to simplify and reduce the cost of building scalable AI agents, making Cloudflare's platform more attractive to developers.
The company has deployed graphics processing units (GPUs) in more than 190 cities globally to provide low-latency AI inference, a crucial capability for real-time AI applications. During its "AI Week 2025" in August, Cloudflare highlighted enhancements to its AI Gateway for efficient deployment of AI-driven applications and outlined its commitment to securing AI environments.
More recently, Cloudflare acquired Human Native, an AI data marketplace founded in 2024, on January 15, 2025. The acquisition is part of Cloudflare's broader strategy to reshape the internet's economic model in the AI era by creating transparent channels for content creators to monetize their work. Human Native specialized in connecting content creators with AI developers to facilitate the discovery and licensing of data for AI training and inference.
Cloudflare plans to build tools that enable content to be structured and easily understood by AI bots and agents, offering creators control over how their content is used and compensated. This vision aligns with the company's earlier announcement in September 2024 to launch a marketplace where website owners could sell AI model providers access to scrape their site's content.
Investors are now turning their attention to Cloudflare's upcoming earnings report on February 10, where the company will report its fourth quarter and full year 2025 financial results. Analysts will be keen to assess whether the increased AI-related activity is translating into higher traffic and revenue. Cloudflare has guided for fourth quarter revenue between $588.5 million and $589.5 million, with non-GAAP earnings per share projected at $0.27. For the full fiscal year 2025, the company anticipates revenue of approximately $2.14 billion and non-GAAP EPS of $0.91.
The stock's rally on Tuesday brings Cloudflare's market capitalization to $60.75 billion, though the shares remain below their 52-week high of $260 reached earlier in the year. The stock has gained significant momentum since touching a 52-week low of $89.42, reflecting growing investor confidence in the company's AI infrastructure story.
Analysts remain broadly optimistic about Cloudflare's prospects, with an average target price of $231.95 according to recent market data. Of the 35 analysts covering the stock, 20 rate it a buy or strong buy, while 12 recommend hold. Only three analysts suggest selling the shares, indicating continued institutional support despite the stock's premium valuation. Cloudflare trades at a forward price-to-earnings ratio of 142.86 and a price-to-sales ratio of 30.17, reflecting high growth expectations.
The company's shares are particularly sensitive to AI-related developments, given its high beta of 1.97 and institutional ownership of 89.2%. As AI agents like Moltbot demonstrate real-world utility, Cloudflare's ability to capture the resulting infrastructure demand will be a key driver of its performance in the coming quarters.