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Jim Cramer Can’t Understand Why Cloudflare’s (NET) Shares Fell

We recently published Jim Cramer Revealed His Big AI Investing Fear & Discussed These 20 Stocks. Cloudflare Inc. (NYSE:NET) is one of the stocks discussed by Jim Cramer.

Cybersecurity services provider Cloudflare Inc. (NYSE:NET)’s shares are up by 24% over the past year and are down by 4.7% year-to-date. May 8th was an eventful day for the firm as the shares closed a whopping 23.6% lower. The dip occurred after the firm reported its fiscal first quarter earnings report, which saw Cloudflare Inc. (NYSE:NET)’s $0.25 in earnings and $640 million in revenue beat analyst estimates. However, the firm also announced in a blog post that it was cutting headcount by 1,100 workers and explained that efficiencies stemming from agentic artificial intelligence use were driving efficiency up. Cramer discussed the headcount reduction and its impact on Cloudflare Inc. (NYSE:NET)’s share price performance:

“I’ll give you Cloudflare then, how about that, you like that? Cloudflare. . .he’s [CEO] talking about how he’s looked it over, he’s looked at what AI can do, he realized that there’s some people who may not be as valuable. AI could do a lot more. Look he’s a very good businessperson. . .it read a little ill advised in the way that Mathew wrote it. Which was like, we had the best quarter. . .but we have to let people off. We’re used to laying people off when things are troubled, now we’re laying people off when things are good.”

“But you know that a layoff by Mathew Prince, who’s a very serious practitioner of the game, says, look we’re gonna make even more money than you want. And yet it’s greeted, as if he’s not doing well. He is doing well and the letter’s right.”

Vision Capital Fund discussed 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)

While we acknowledge the risk and potential of 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 NET and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy. 

Disclosure: None. Follow Insider Monkey on Google News.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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