Here’s What Makes Cloudflare (NET) Worth Holding Long-Term

Sands Capital, an investment management company, released its “Sands Capital Global Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global Growth adopts a flexible approach to identify the most promising growth companies worldwide. Global equities outperformed the MSCI ACWI in the quarter. The portfolio returned 21.7% in the quarter compared to 11.5% for the index. The second quarter results were the fourth best in both absolute and relative terms since its 2008 inception. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its second-quarter 2025 investor letter, Sands Capital Global Growth Strategy 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 15.01%, and its shares gained 185.69% of their value over the last 52 weeks. On September 15, 2025, Cloudflare, Inc. (NYSE:NET) stock closed at $226.01 per share, with a market capitalization of $78.76 billion.

Sands Capital Global Growth Strategy stated the following regarding Cloudflare, Inc. (NYSE:NET) in its second quarter 2025 investor letter:

“Cloudflare, Inc. (NYSE:NET) is an emerging network-as-a-service leader. The business reported a strong quarter, highlighted by its largest deal to date—a five-year, $130 million contract for its Workers platform. This deal underscores Workers’ growing competitiveness against hyperscalers on both performance and price. Management expressed confidence that more nine-figure deals are within reach. The quarter also included major Zero Trust wins, including a $12.7 million, seven-year contract and a large U.S. government deal, signaling broader traction across use cases. Revenue came in slightly ahead of consensus, and full-year guidance for 25 percent growth was reaffirmed. While capital expenditures rose due to tariff-related pull-forwards, Cloudflare still expects to meet its full-year targets. Strong momentum and improving sales execution continue to support our conviction in the long-term case.”

Is Cloudflare, Inc. (NET) the Best High-Risk Stock to Buy According to Billionaires?

Cloudflare, Inc. (NYSE:NET) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Cloudflare, Inc. (NYSE:NET) at the end of the second quarter, which was 65 in the previous quarter. Cloudflare, Inc.’s (NYSE:NET) revenue for the second quarter increased 28% year-over-year to $512.3 million. 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 Brown Advisory Mid-Cap Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 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.