Here’s What Drove Vision Capital Fund to Pick Cloudflare (NET)

Vision Capital Fund, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned +15.6% net, YTD, compared to +14.8% for the S&P 500 for the same period. Since its inception on October 1, 2024, the fund has returned a cumulative of +27.8% net, compared to +17.6% for the S&P 500. Additionally, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Vision Capital Fund highlighted stocks such as Cloudflare, Inc. (NYSE:NET). Cloudflare, Inc. (NYSE:NET) is a cloud services provider that delivers a range of services to businesses worldwide. The one-month return of Cloudflare, Inc. (NYSE:NET) was -12.38%, and its shares gained 85.13% of their value over the last 52 weeks. On December 08, 2025, Cloudflare, Inc. (NYSE:NET) stock closed at $205.86 per share, with a market capitalization of $72.109 billion.

Vision Capital Fund stated the following regarding Cloudflare, Inc. (NYSE:NET) in its third quarter 2025 investor letter:

“Separately, we added a new position in Cloudflare Inc (NYSE: NET) in September (see memo). Cloudflare is the dominant connectivity cloud offering networking and security software as a service (SaaS). Cloudflare offers over 60 products that enable businesses to connect and protect external-facing and internal systems across application services, network services, and zero-trust services, which its customers increasingly want to consolidate.

Cloudflare’s reverse proxy service is used by 80% of websites, and 20% of the internet goes through it. Today, more websites are using Cloudflare than all traditional CDNs combined (24.5% for web servers and 14.7% for DNS servers). It is Cloudflare’s reverse proxy that allows it to sit in front of its customers’ web servers, allowing it to provide a wide and growing range of services that increase the security, performance, and reliability of its customers…” (Click here to read the full text)

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Cloudflare, Inc. (NYSE:NET) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held Cloudflare, Inc. (NYSE:NET) at the end of the third quarter, which was 59 in the previous quarter. In Q3 2025, Cloudflare, Inc. (NYSE:NET) reported revenue of $562 million, marking an increase of 30.7% year-over-year. While we acknowledge the risk and potential of Cloudflare, Inc. (NYSE:NET) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Cloudflare, Inc. (NYSE:NET) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Cloudflare, Inc. (NYSE:NET) and shared the list of stocks Jim Cramer recently discussed. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.