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Really? Cloudflare isn't solely a CDN anymore. CDN and DDOS-protection were the most logical "first" products to build based on their SDN ( Software Defined Ne

Really? Cloudflare isn't solely a CDN anymore. CDN and DDOS-protection were the most logical "first" products to build based on their SDN ( Software Defined Networking). A cloud is the next thing and there's a lot of money involved with the cloud. I see them as the only real competitor/challenger to Azure, AWS, GCE, ... because they aren't bound to regions ( less DevOps) For example, what you might not know about Durable Objects => https://boristane.com/blog/what-are-cloudflare-durable-objects/ https://boristane.com/blog/what-are-cloudflare-durable-objec...

redwood 11mo ago
I'm not saying they're not an interesting company I'm just reflecting on their extraordinary valuation multiple which puts them in a unique league that are predominantly AI bets. Their founder is uniquely strong storyteller. If you look at their capital investment it's just not anywhere close to a top tier cloud player.. so while they offer some interesting building blocks it's just not clear that large workloads move there anytime soon (https://substackcdn.com/image/fetch/$s_!-PwA!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fdc3c6694-db45-4cac-92c6-dc8fbf2fe433_1344x621.png https://substackcdn.com/image/fetch/$s_!-PwA!,f_auto,q_auto:...)
- NicoJuicy 11mo ago
  Cloudflare went x 10 since their IPO 6 years ago ( stocks). Revenue: $ 85 million (2016) $ 287 million (2019) IPO year $ 1,670 million (2024) $ 2,154 million (2025) https://www.macrotrends.net/stocks/charts/NET/cloudflare/revenue https://www.macrotrends.net/stocks/charts/NET/cloudflare/rev... That's not a crazy valuation multiple considering their growth. Palentir is a body shop. Cloudflare is infrastructure/cloud. Very big difference ( at least to me) Stock ( Cloudflare - https://finance.yahoo.com/quote/NET/holders/ https://finance.yahoo.com/quote/NET/holders/ ): 90.87% % of Shares Held by Institutions Stock ( Palantir - https://finance.yahoo.com/quote/PLTR/holders/ https://finance.yahoo.com/quote/PLTR/holders/): 60.09% % of Shares Held by Institutions
  - redwood 11mo ago
    It's not a question of crazy or not, it's just an extreme end of the multiple spectrum.. and the company is not in a positive operating margin position. So you're right they have a strong track record and there's optimism they turn a profit, but it's highly speculative. Nothing wrong with that. Just makes sense they are fleshing out their AI story while they're in a position to invest with equity IMO
    - NicoJuicy 11mo ago
      Their not investing with equity. Cloudflare is cash flow positive and re-investing.
      - redwood 11mo ago
        Well I'd assume the acquisition is with equity and that much of their employee compensation comes from equity, neither of which show up in a free cash flow view. Still you do make a good point. I'd have expected bigger capital costs that even if amortized would show up on cash flow some of the time.. but they appear to run a very tight capex ship. So more security SaaS than cloud provider IMO

redwood 11mo ago

I'm not saying they're not an interesting company I'm just reflecting on their extraordinary valuation multiple which puts them in a unique league that are predominantly AI bets. Their founder is uniquely strong storyteller. If you look at their capital investment it's just not anywhere close to a top tier cloud player.. so while they offer some interesting building blocks it's just not clear that large workloads move there anytime soon (https://substackcdn.com/image/fetch/$s_!-PwA!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fdc3c6694-db45-4cac-92c6-dc8fbf2fe433_1344x621.png https://substackcdn.com/image/fetch/$s_!-PwA!,f_auto,q_auto:...)

NicoJuicy 11mo ago
Cloudflare went x 10 since their IPO 6 years ago ( stocks). Revenue: $ 85 million (2016) $ 287 million (2019) IPO year $ 1,670 million (2024) $ 2,154 million (2025) https://www.macrotrends.net/stocks/charts/NET/cloudflare/revenue https://www.macrotrends.net/stocks/charts/NET/cloudflare/rev... That's not a crazy valuation multiple considering their growth. Palentir is a body shop. Cloudflare is infrastructure/cloud. Very big difference ( at least to me) Stock ( Cloudflare - https://finance.yahoo.com/quote/NET/holders/ https://finance.yahoo.com/quote/NET/holders/ ): 90.87% % of Shares Held by Institutions Stock ( Palantir - https://finance.yahoo.com/quote/PLTR/holders/ https://finance.yahoo.com/quote/PLTR/holders/): 60.09% % of Shares Held by Institutions
- redwood 11mo ago
  It's not a question of crazy or not, it's just an extreme end of the multiple spectrum.. and the company is not in a positive operating margin position. So you're right they have a strong track record and there's optimism they turn a profit, but it's highly speculative. Nothing wrong with that. Just makes sense they are fleshing out their AI story while they're in a position to invest with equity IMO
  - NicoJuicy 11mo ago
    Their not investing with equity. Cloudflare is cash flow positive and re-investing.
    - redwood 11mo ago
      Well I'd assume the acquisition is with equity and that much of their employee compensation comes from equity, neither of which show up in a free cash flow view. Still you do make a good point. I'd have expected bigger capital costs that even if amortized would show up on cash flow some of the time.. but they appear to run a very tight capex ship. So more security SaaS than cloud provider IMO