Key Takeaways
- Cloudflare stock rose 6% and Datadog rose 7% today after PHP patched two critical flaws in software that runs an estimated 70% of websites.
- Cloudflare gave every customer firewall rules against the known attacks, including free users, which shows why its place in front of millions of sites is valuable.
- Analysts expect Cloudflare’s revenue to more than double, from $2.17 billion in 2025 to $4.73 billion in 2028.
- The stock was already richly valued after a big run this year, so watch whether CISA lists the flaw and whether free users move to paid plans.
Cloudflare (NET) stock jumped 6% today after PHP rushed out emergency patches for two critical flaws in the software behind an estimated 70% of the world’s websites. Other stocks tied to protecting websites and apps rose too, including Datadog (DDOG), up 7%.
What exactly happened
The flaws let an attacker take over any web server running PHP 5.4 or later. One of them can also leak passwords, session tokens and API keys. Security researcher Kevin Beaumont called it “one of the biggest vulns in years.”
Attackers didn’t wait for the fix. Cloudflare logged the first attacks at 3:43 a.m. ET, hours before the official patch landed around 10 a.m. ET.
Cloudflare CTO Dane Knecht’s response:
“PHP sites behind Cloudflare already have an initial set of WAF rules deployed for the known exploit vectors in these vulnerabilities. The rules are available to all customers, including free.”
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The free tier earns its keep
That last line is the story. Cloudflare sits in front of millions of PHP sites, so one set of rules covered all of them at once, before most of their owners could patch.
That’s why it pays to give protection away. Every free site Cloudflare shields in a crisis like this one gives its owner a reason to stay, and eventually to pay.
And the paid business is growing fast. Analysts expect revenue to more than double, from $2.17 billion in 2025 to $4.73 billion in 2028…
Nothing in today’s news should move those estimates yet. That would take site owners signing up for paid plans after the scare, and the next few quarters will show whether they do.
A big day at a steep price
Today’s pop comes right after Cloudflare dropped 15% in a week. Before that, a run had the stock up 78% since January by early October. Before today’s move it already traded at nearly 200x forward earnings, and today’s jump pushes that higher.
Datadog’s 7% gain rests on even less: none of today’s coverage of the flaw names it.
The fix has limits, too. Knecht himself called the rules “a STOPGAP only,” and if new attacks get past them, another round of patches could come before the week is out.
My take: Today is a great ad for Cloudflare’s network, and I’d expect it to win some new business from this. But at this valuation, the market was already paying for that kind of growth, so I wouldn’t chase today’s move.
Of course, the next few days will decide how big this gets. If CISA adds the flaws to its Known Exploited Vulnerabilities catalog, federal agencies will face patching deadlines and demand for firewall protection should stay high. Slow patching at big web hosts would also leave sites exposed for longer.
So what is Cloudflare stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
