Cloudflare Falls 2% on Tuesday as Risk Appetite Weakens

Cloudflare Inc. shares fell about 2% on Tuesday as risk appetite weakened across the broader stock market. Investors are pulling back from high-valuation growth stocks. The Nasdaq fell 0.15%, and the S&P 500 fell 0.32%.

Cloudflare's decline appears largely tied to broader market softness rather than company-specific news. With equities under pressure, traders are watching whether Cloudflare can hold key technical levels after a multi-month rally.

Cloudflare Partners with OpenAI to Combat Cyber Threats with AI

Separately, Cloudflare said Thursday it is partnering with OpenAI to launch an AI-driven service that can discover, block, and help fix software vulnerabilities.

The vulnerability discovery and remediation service uses OpenAI's Daybreak model, including GPT-5.6 Cyber. It combines AI code analysis with real-time data from Cloudflare's global network.

The system can identify high-risk flaws and create custom firewall rules to block attacks. It can also generate code patches for developers. However, Cloudflare said no fixes or security rules will go live without human approval.

The service launches as the number of software vulnerabilities climbs. As of September, the U.S. National Vulnerability Database had recorded 60,475 vulnerabilities, surpassing the 48,185 recorded for all of 2025.

The service is available via invite-only access to select Cloudflare enterprise customers through Cloudflare Managed Defense.

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Technical Analysis

Despite the recent pullback, Cloudflare remains in a long-term uptrend. The stock trades 10.9% above its 100-day simple moving average and 25.2% above its 200-day simple moving average.

Its bullish structure also remains intact after a golden cross formed in May. However, near-term momentum has weakened. After retreating from August highs, NET is currently 5.3% below its 20-day simple moving average.

The relative strength index stands at 47, placing the stock in neutral territory. This suggests neither buyers nor sellers are firmly in control.

Traders are watching $291 as a key resistance level. A break above that level could help stabilize the short-term trend. Meanwhile, $250.50 remains a key support level. That area is near the 100-day simple moving average at $251.59.

Analyst Outlook

Cloudflare has a consensus Buy rating with an average price target of $341.68.

Citizens maintained an Outperform rating and a $394 price target on August 31. Citigroup maintained a Buy rating and raised its price target to $400 on August 10. Susquehanna maintained a Neutral rating and raised its price target to $300 on August 10.

Edge Ranking

The Edge scorecard gives Cloudflare a momentum score of 85.61. That reading indicates long-term price performance remains strong despite the recent pullback.

Conclusion: Cloudflare's long-term momentum remains bullish, but its short-term trend has weakened. A break above $291 could reinforce the setup. However, sustained selling could put the $250.50 support zone in focus.

Major ETF Holdings

Cloudflare has a 5.39% weight in the Amplify Cybersecurity ETF, a 4.55% weight in the Global X Cloud Computing ETF, and a 5.68% weight in the Baillie Gifford Long-Term Global Growth ETF.

These weights mean ETF inflows and outflows could create buying or selling pressure on Cloudflare shares.

Price Action

NET share performance: As of Tuesday's writing, Cloudflare shares were down 1.69% at $278.75.