Cloudflare shares jump after raised forecast on AI spending

Cloudflare shares rose 16% before the bell after the connectivity cloud company raised its annual forecasts, giving investors a fresh signal that artificial intelligence spending is reaching the network and security layer as well as the companies building models. The move came after Cloudflare said stronger enterprise demand tied to AI infrastructure would help drive demand for its networking and security products.

The company also raised its full-year revenue forecast above Wall Street expectations after stronger quarterly results. Cloudflare’s second-quarter revenue reached $696.1 million, up 36% from a year earlier, underscoring how quickly the business has been expanding as more traffic flows through its platform. Cloudflare has described itself as a connectivity cloud company with networking, security and developer-platform products, a mix that places it squarely in the path of AI workloads that need faster and more resilient delivery.

Cloudflare has been making the AI case to investors for months. In its first-quarter 2026 press release, the company said, “AI is driving a fundamental re-platforming of the Internet” and said it was “shaping up to be the biggest tailwind we’ve ever seen in Cloudflare’s history.” That message stood in contrast to the more cautious mood in May, when the company disappointed investors betting on an AI boost and said it would cut 1,100 jobs.

The latest forecast increase suggests the market is paying more attention to the less glamorous parts of the AI buildout, including the systems that move, secure and serve traffic. Cloudflare said the rise of AI agents would keep driving traffic across its network, and the company pressed that case again at an investor day in New York City on June 9. For a market that has often focused on chipmakers and model developers, Cloudflare’s rally pointed to a broader reallocation of AI dollars into infrastructure businesses that can turn heavier usage into recurring revenue.