When it comes to web security and content delivery, Cloudflare (NYSE:NET) is among the most respected businesses in the industry. Folks who have bought and held NET stock have enjoyed well-deserved long-term gains.
Yet, no stock can just keep going up forever. Even though Cloudflare’s shareholders are betting on a winner, they’ll have to deal with occasional volatility because it’s unavoidable on Wall Street.
Lately, there’s been a rotation out of so-called “momo” or momentum stocks, including NET stock. This doesn’t necessarily mean that there’s something wrong with Cloudflare as a company.
If anything, it’s just the buyers taking a breather while the market rotates into “value” stocks. It’s ironic, really, since Cloudflare offers plenty of value to its shareholders.
NET Stock at a Glance
Turning the clock back for a moment, NET stock actually got off to a slow start in 2021. Frustratingly, the stock was stuck near $70 for several months.
However, a well-documented event put cybersecurity in focus and made Cloudflare a darling of the market. Of course, I’m referring to the Colonial Pipeline breach. This unfortunate incident exposed vulnerabilities in computer networks, thereby highlighting the need for cybersecurity in 2021.
Consequently, from April through the middle of November, the NET stock short-sellers didn’t stand a chance. They got pummeled as the share price soared to a 52-week high of $221.64 on Nov. 18.
It really is true that the trend is your friend — but it’s also true that no stock can just go up forever. Thus, the Cloudflare share price retreated to around $132 by mid-December.
If you still like the company — and there’s no reason not to — then this drawdown is really just a gift from the market to you. These gifts aren’t given every day. Hence, you’re encouraged to read the full story and make a serious decision today about NET stock.
Collaborating to Stop Cyber Attacks
Even though Cloudflare’s software solutions are already quite powerful, it certainly won’t hurt if the company is willing to work with cyber insurers to enhance network security. It appears that Cloudflare is doing this right now, as the company is partnering with a handful of leading cyber insurance companies in order to help businesses manage their risks online.
While using Cloudflare to protect their websites, applications, employees, and corporate networks, eligible Cloudflare customers can qualify for discounts or other added benefits from insurance providers like At-Bay, Coalition, and Cowbell Cyber.
Cloudflare co-founder and Chief Executive Officer (CEO) Matthew Prince compared this partnership to a safe-driving discount that might be granted through an auto insurance company.
“By working closely with some of the most prominent cyber insurers and incident response providers we are now helping businesses to comprehensively manage their risk online,” Prince explained.
Zero Trust for a Safer Network
The idea of zero trust might sound impersonal, but it is an essential part of preventing cyber crime.
In that vein, Cloudflare recently expanded its groundbreaking Zero Trust platform’s firewall capabilities. With that, companies can be better equipped to secure their networks across their branch offices, data centers, and clouds.
It’s a major upgrade, as Cloudflare’s new cloud firewall functionality empowers chief information officers (CIOs) to effectively secure their entire corporate network. In the process, they can apply zero-trust policies to all traffic, while also gaining deeper network visibility. Importantly, Cloudflare’s firewall runs everywhere. As a result, CIOs won’t need to rely on centralizing traffic on one box in one location.
Cloudflare’s CEO observed that his company’s product, including the Zero Trust platform, serve a critical purpose.
“CIOs know that the corporate network is changing fast, and we want to help make that transition easy, flexible, and scalable,” Prince clarified.
The Takeaway
Year after year, Cloudflare remains a leader in the ongoing battle against cyber crime. Knowing this, Wall Street has rewarded Cloudflare’s shareholders will outstanding long-term returns.
However, a recent rotation out of momentum stocks put NET stock on the back burner. Is this really a problem, though? Not at all. Cloudflare clearly isn’t slowing down in its quest to be the best in network-security software. So, don’t sleep on this crucial moment with Cloudflare. If you’ve been waiting for a nice dip in NET stock, just remember that these opportunities don’t come along very often.
Cloudflare currently gets a grade of “B” in my Portfolio Grader.
— Louis Navellier and the InvestorPlace Research Staff
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Source: Investor Place