Could This 1 Stock Be the Best Quantum Computing Buy Right Now?

Quantum computing is quickly emerging as the top new tech trend. Investors are following pure-play names such as D-Wave Quantum (QBTS), Rigetti Computing (RGTI) and Quantum Computing (QUBT), and also tracking established tech giants like Microsoft (MSFT) and Alphabet (GOOG) that have thrown their hats into the quantum computing ring.

However, mainstream awareness of the new tech coupled with heavy investment creates a greater risk of quantum-focused cyberattacks. Until now, cryptographic algorithms protected against cyberattacks, but industry veterans believe that with quantum computers that may not be the case anymore. Quantum computers could crack these algorithms in as little as five years… and potentially even quicker. This is where a case for investing in Cloudflare (NET) can be made.

About Cloudflare Stock 

Founded in 2009, Cloudflare (NET) is a cloud services provider aimed at enhancing the security, performance, and reliability of internet applications. Cloudflare offers a comprehensive suite of services including content delivery network (CDN) solutions, distributed denial-of-service (DDoS) protection, internet security, and distributed domain name server (DNS) services. These services are designed to improve web applications’ and websites’ speed, security, and reliability. The company’s market capitalization currently stands at $40 billion.

Cloudflare is outperforming the broader market and NET stock is up nearly 11% on a year-to-date basis. 

The company recently announced that it will expand its post-cryptography offering to its Zero Trust Network Access solution to protect against cyberattacks originating from quantum computers. Working on post-quantum cryptography since 2017, CEO Matthew Prince said, "We want every Cloudflare customer to have a clear path to quantum safety, and we are already working with some of the most innovative banks, ISPs, and governments around the world as they begin their journeys to quantum security. We will continue to make advanced cryptography accessible to everyone, at no cost, in all of our products.”

Reassuringly, the wider analyst community also remains bullish about the company. Why? Let’s find out.

Steady Financials

Cloudflare’s numbers for the most recent quarter surpassed expectations as both revenue and earnings beat estimates. Revenues for the fourth quarter stood at $459.9 million, up 27% from the previous year. The number of customers that spend at least $1 million grew by 47% yearly to 173. 

Earnings increased by 26.7% in the same period to $0.19 per share, slightly ahead of the consensus estimate of $0.18. This marked the 10th consecutive quarter of earnings beats from the company.

Cash flow for 2024 remained solid as the company reported net cash from operating activities of $380.4 million compared to $254.4 million in the year-ago period. 

Finally, Cloudflare expects revenue for Q1 2025 to be in the range of $468 million to $469 million, the midpoint of which represents yearly growth of 23.7%.

Strategic Drivers

Cloudflare has been actively working on post-quantum cryptography since 2017, positioning itself ahead of the curve in quantum computing cybersecurity. This early initiative gives the company a strategic advantage as the demand for quantum-resistant security solutions continues to grow.

Further, large enterprises and developers rely on Cloudflare because it enhances the security and efficiency of their online services without necessitating costly hardware investments or an extensive IT infrastructure. Looking ahead, Cloudflare anticipates that AI-driven workloads will become a major catalyst for its growth in 2025 and 2026.

A leading force in the rapidly expanding CDN sector, Cloudflare benefits from a strong competitive edge through its extensive collaborations with internet service providers (ISPs). These partnerships enable the company to offer competitive pricing, making its solutions widely accessible. CDN technology is crucial across multiple industries, including e-commerce, media, entertainment, technology, education, and healthcare. 

Notably, Cloudflare’s pricing model stands out in the market, as it provides some of the most affordable plans among competitors while also offering flexible, usage-based pricing structures. This approach has made the platform particularly appealing to smaller businesses, helping the company capture an estimated 39.2% share of the CDN market. Cloudflare attributes its ability to maintain cost-effective pricing — even offering free-tier plans — to its ISP partnerships. By working with Cloudflare, ISPs can directly exchange traffic for websites running on the platform, reducing both latency and operational expenses.

Finally, on the artificial intelligence (AI) front, Cloudflare continues to strengthen its product innovation strategy, notably with the introduction of enhanced capabilities for its serverless AI inference platform, Workers AI, launched in Q3. This advancement empowers developers to build more efficient applications by leveraging a global network of high-performance GPUs across more than 180 cities. Management remains confident that Workers AI can deliver substantial improvements in AI inference optimization, leading to faster processing speeds and lower costs for customers. These advantages are expected to drive higher margins and maximize returns on capital expenditures, reinforcing Cloudflare’s long-term competitive positioning.

Analyst Opinions on NET Stock 

Thus, analysts have deemed the stock a “Moderate Buy” with a mean target price of $137.52 which indicates upside potential of about 20% from current levels. Out of 31 analysts covering the stock, 10 have a “Strong Buy” rating, two have a “Moderate Buy” rating, 15 have a “Hold” rating, one has a “Moderate Sell” rating, and three have a “Strong Sell” rating.