Back to top

Image: Shutterstock

Cloudflare (NET) Forays Into the Multicloud Networking Market

Read MoreHide Full Article

Cloudflare, Inc. (NET - Free Report) has unveiled a groundbreaking solution, Magic Cloud Networking, designed to simplify and secure multicloud environments for businesses. This initiative marks Cloudflare's strategic move into the multicloud networking arena, powered by the acquisition of Nefeli Networks' technology.

NET Strengthens Position in Connectivity Cloud Space

With the majority of businesses leveraging public cloud providers, there's a growing need to efficiently manage cloud networking platforms across various virtual private clouds (VPCs). Multicloud networking offers the flexibility to utilize multiple cloud environments while streamlining connectivity and security policies. Nefeli's technology automates and simplifies this process, providing a unified management layer for cloud infrastructure deployments.

Matthew Prince, the CEO and co-founder of Cloudflare, emphasizes the significance of unlocking the cloud's full potential by enabling customers to leverage the best features of each cloud provider seamlessly. Magic Cloud Networking integrates cloud network orchestration with Cloudflare's global network, offering businesses enhanced control, visibility, agility and resiliency in their cloud environments.

Nefeli’s technology will be seamlessly integrated into Cloudflare One, the company's comprehensive Secure Access Service Edge platform. This integration will provide customers with a unified management experience across their entire enterprise network, spanning cloud and on-premises deployments.

Eugenia Corrales, the CEO of Nefeli, highlights the seamless integration of multicloud networking capabilities into Cloudflare's robust platform. Businesses will now be able to easily connect and manage their cloud infrastructure with built-in security and performance at scale.

Dr. Scott Shenker, the co-founder and chairman of Nefeli, envisions a future where complexity no longer hinders innovation. By bringing simplicity and scalability together, Cloudflare and Nefeli are revolutionizing multi-cloud networking, paving the way for businesses to embrace cloud technologies with confidence.

With Magic Cloud Networking, Cloudflare extends its position as a leader in the connectivity cloud space, offering businesses a one-stop solution for transforming their network architecture and unlocking new opportunities for growth and innovation in the cloud era.

Cloudflare Continues to Enhance Portfolio

Cloudflare continues to focus on strengthening its portfolio by adding new capabilities that include Defensive.AI, Cloudflare One Data Protection Suite, Hyperdrive and Magic WAN Connector.

Moreover, the company has acquired multiple companies to expand its portfolio. NET expanded its product offerings by acquiring Area 1 Security, one of the leaders of phishing attack mitigation solution providers. The company also acquired Vectrix, which offers businesses easy visibility and control over all their SaaS applications with just one click.

Cloudflare is witnessing huge growth in customer numbers for its core application services, Zero Trust solutions, and network services like Magic Transit in Cloudflare One. Given the risks posed by advanced cyber threats to businesses' finances and reputations, NET is rapidly expanding its role in this area with its advanced global cloud security platforms.

All this has been driving Cloudflare’s financial performance. In the recently reported quarterly results for the fourth quarter of 2023, the company’s revenues and adjusted EPS surged 32% and 150%, respectively, on a year-over-year basis. The robust top-line growth was aided by client wins and growing momentum among large enterprise customers, driven by the heightened need for stronger security and a zero-trust approach.

Zacks Rank & Stocks to Consider

Cloudflare currently carries a Zacks Rank #3 (Hold). Shares of NET have soared 17.1% year to date (YTD).

Some better-ranked stocks from the broader technology sector are NVIDIA Corporation (NVDA - Free Report) , Meta Platforms (META - Free Report) and Amazon.com (AMZN - Free Report) . Currently, NVIDIA and Meta each sport a Zacks Rank #1 (Strong Buy), while Amazon has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 16.4% upward to $23.22 per share in the past 30 days, which suggests year-over-year growth of 79.2%. The long-term estimated earnings growth rate for the stock stands at 29.7%. Shares of NVDA have jumped 79.4% YTD.

The consensus mark for Meta’s 2024 earnings has been revised upward by 39 cents to $19.94 per share over the past 30 days, indicating a 34.1% increase from 2023. It has a long-term earnings growth expectation of 19.5%. In the trailing 12 months, META stock has surged 40.4% YTD.

The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 4 cents to $4.06 per share in the past 30 days, which calls for an increase of 40% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.1%. AMZN stock has returned 14.2% YTD.

Published in