If you've been waiting for a moment to pull the trigger on a well-established cybersecurity stock, the universe just gave you a pretty loud signal. Earlier this week, Cloudflare (NET 0.63%) announced a partnership with Mastercard (MA +0.15%) that could reshape how millions of small businesses, governments, and critical infrastructure operators defend themselves online.
Here's the setup: Small businesses account for roughly half of the world's gross domestic product (GDP), yet they're attacked at a greater rate than Fortune 500 companies. Cloudflare's Chief Strategy Officer Stephanie Cohen called them "target rich, but resource poor."
There's a massive market up for grabs, and Cloudflare has the right partner to chase it. It's like a heavyweight player stepping into the ring, ready to take a big bite out of the small business opportunity.
Image source: Getty Images.
Simply put, the deal combines Mastercard's security monitoring tools with Cloudflare's Application Security products. This amounts to a single platform that helps organizations spot hidden security risks, get real-time security grades, and quickly roll out protections such as web application firewalls and encryption.
Cloudflare is playing the long game
Cloudflare has been building one of the most comprehensive connectivity clouds on the planet, and this Mastercard partnership fits squarely into that strategy. It deepens Cloudflare's reach into regulated industries and government contracts, exactly the kind of sticky, high-value enterprise relationships that make a small investment so enticing.
When a payments giant with reach across 200-plus countries validates your security platform, it's a stamp of credibility that opens doors money can't buy.
Cloudflare is deeply embedded across the internet, with 35% of Fortune 500 companies as paying customers, roughly 20% of the web running through its network, and over 221,000 paying customers overall. It serves everyone from global brands to governments and nonprofits.
On top of this, Cloudflare's edge shows up in its numbers, with revenue jumping 31% year over year to $562 million last quarter and gross margins above 75%, proving its network is becoming essential infrastructure for big customers.
With 80% of artificial intelligence (AI) companies already using Cloudflare and AI traffic likely to explode, the stock may stay expensive, but the stock's track record (up roughly 960% since its 2019 IPO) suggests long-term upside is still on the table.
NYSE: NET
Key Data Points
Why $500 invested now could pay off
Cybersecurity isn't slowing down. Threats are multiplying (think AI, deepfakes), attack surfaces are expanding, and the organizations least equipped to defend themselves are the ones most in need. Cloudflare is positioning itself as the default security layer for the underserved internet -- and now it has Mastercard helping it get there.
For $500, you're buying a stake in a company that's building the immune system of the modern internet. And with partners like Mastercard helping with that mission, patient investors could be very glad they got in now.
