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Cloudflare (NYSE:NET) shares surged 26% on Friday after the cloud-based security company posted second-quarter results that handily topped estimates and raised its revenue outlook for the rest of the year, but cloud computing stocks struggled to end the week.
Cloudflare (NET) said it expects 2022 sales to be between $968M and $972M, up from a prior outlook of $955M-$959M. Analysts were expecting the company to generate $958.7M in sales.
The company also forecast strong growth for the third-quarter, with sales estimated to be between $350M and $351M, compared to estimates of $246.95M.
During the second-quarter, Cloudflare (NET) broke even on an adjusted basis, with sales coming in at $234.5M, up 53.9% year-over-year. Analysts were expecting a 1 cent loss on $227.36M in revenue.
Despite the strong results from Cloudflare (NET), software stocks struggled on Friday as traders weighed the prospects of another larger interest rate hike from the Federal Reserve after a strong jobs report in July.
Cloudflare (NET) competitors Fastly (NYSE:FSLY) and Akamai (NASDAQ:AKAM) were lower in mid-day trading, with Fastly off nearly 3.5%.
Other cloud computing stocks, including Microsoft (NASDAQ:MSFT), Salesforce (CRM), Oracle (ORCL) and Intuit (INTU), also saw modest losses.
Conversely, Adobe (ADBE) and several cyber security stocks, including Fortinet (FTNT), Tenable (TENB) and CyberArk (CYBR), bucked the trend, seeing modest gains at mid-day.
In May, Cloudflare (NET) said it had joined the European Union’s Cloud Code of Conduct General Assembly.
