Movement Alert｜Cloudflare Falls 4.2% in Regular Trading, Layoff Controversy and Weak Q2 Guidance Weigh on Sentiment

Market Focus05-27

On May 27, Cloudflare declined 4.2% in regular trading, trading at approximately $210.97 per share, with trading volume of $103 million.

The decline reflects dual headwinds from an ongoing layoff controversy and softer-than-expected second-quarter guidance. The company announced a global workforce reduction of approximately 20% as it shifts to an AI-first operational model, sparking widespread market debate. While its first-quarter results exceeded expectations — revenue grew 34% year-over-year to $639.8 million and Non-GAAP EPS of $0.25 beat consensus — the second-quarter revenue guidance came in slightly below analyst expectations, pressuring the stock in the near term.

RBC Capital Markets maintained its Outperform rating and $240 target price, citing Cloudflare's favorable positioning in the AI agent space and potential to achieve its 2028 revenue target of $5 billion ahead of schedule. However, the combination of guidance weakness and layoff-related controversy continues to dominate price action. Within the Internet Services & Infrastructure sector, CoreWeave fell 3.96%, DigitalOcean dropped 4.84%, and Snowflake declined 1.19%, reflecting broad sector pressure.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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