Cloudflare has raised its adjusted full-year 2026 earnings per share forecast to $1.25–$1.26, up from the previous $1.19–$1.20, exceeding Wall Street's average expectation of $1.20. The company's stock surged over 16% in after-hours trading. This also shows that its strategic adjustment announced in May, which included laying off one-fifth of its workforce and shifting to an AI-first operational model, has not impacted growth. Cloudflare attributes the accelerated performance to structural changes in network demand driven by AI. Matthew Prince stated in a press release: 'As the internet transitions to AI-powered answer engines and agent-driven business models, we are witnessing a fundamental reconstruction of the internet to accommodate machine-to-machine traffic.' This insight points to a core logic: the large-scale deployment of AI models is generating massive automated traffic between machines, and Cloudflare's network infrastructure happens to be at the critical juncture of this traffic. A few days ago, I mentioned that NET increasingly resembles the network infrastructure of the Agent era. AI can replace many things, but AI needs NET's globally distributed CDN network. This was the core logic back in February when I believed NET was undervalued. Looking back now at this tweet from mid-February: https://(x.com)/qinbafrank/status/2021506837720498224?s=46&t=k6rimWsEbo2D2tXolYcM-A, which argued that security stocks were undervalued, it almost perfectly called the bottom of the security sector.