New York, January 28, 2026, 12:14 (EST) — Regular session
- Cloudflare shares dropped roughly 6.5% on Wednesday, pulling back after a two-day rally fueled by AI optimism.
- The recent rally stemmed from online chatter about an open-source AI agent initially named Clawdbot, now rebranded as “Moltbot.”
- Investors eye earnings on Feb. 10, searching for proof that AI-agent traffic is turning into actual revenue.
Cloudflare shares dropped 6.5% Wednesday, reversing a two-day rally fueled by AI buzz. The internet security company lost $13.39 to trade at $192.56 in midday New York trading, after hitting an intraday high of $212.36.
This shift is significant as Cloudflare has emerged as an unexpected stand-in for “agentic” AI — systems that act on behalf of users rather than merely responding to queries. Investors are now grappling with whether this will translate into sustained paid usage or remain a quick speculative play.
Wall Street is diving back into the AI buzz. The S&P 500 nudged past 7,000 briefly on Wednesday, marking a fresh milestone as traders held their breath ahead of the Federal Reserve’s policy call and earnings reports from major tech giants.
Cloudflare surged in early trading Tuesday after buzz around an open-source AI agent called Clawdbot, designed to run with Anthropic’s Claude models, spread on social media. Wolfe Research’s Joshua Tilton noted Cloudflare stands to “capture that activity” as these agents gain traction. CEO Matthew Prince added that roughly 80% of top AI firms already rely on Cloudflare’s infrastructure. The company is set to release quarterly earnings on Feb. 10. Reuters
Clawdbot has dropped its original name. Developer Peter Steinberger revealed the project is now called “Moltbot” following trademark concerns raised by Anthropic. He noted the rebranding wasn’t his decision. Business Insider
That hasn’t stopped the market from zeroing in on Cloudflare. Barron’s noted that some users—some claiming to be Cloudflare developers—have recommended running the tool through Cloudflare Tunnel. This software links a local service to the internet without revealing the server’s public address. The bot markets itself as a personal assistant capable of managing messaging, email, and calendar tasks.
RBC Capital Markets analyst Matthew Hedberg flagged that autonomous agents might increase security risks by gaining deep file and app access, putting identity controls under pressure. He pointed to companies like CyberArk, Palo Alto Networks, Okta, and SailPoint as potential beneficiaries if demand for bot security rises.
TD Cowen reaffirmed its Buy rating on Cloudflare, maintaining a $265 price target. The firm highlighted Cloudflare’s edge network and Tunnel product as key infrastructure for a more automated web. They also pointed out Cloudflare’s claim that 80% of the top 50 generative AI companies rely on its services.
Separately, director Carl Ledbetter filed a Form 144 indicating plans to offload 60,000 Cloudflare shares, with the anticipated sale date around Jan. 27. This SEC-required notice applies when affiliates intend to sell restricted or control securities beyond certain limits, though it doesn’t ensure the transaction will occur.
That said, the rally leans more on speculation than actual deals. If Moltbot turns out difficult to lock down or expensive to operate, adoption might hit a wall. The additional traffic bulls are counting on could fail to boost Cloudflare’s revenue anytime soon.
Cloudflare slipped on Wednesday but only after posting solid jumps of roughly 9% and 8.8% on Monday and Tuesday. Moves like these tend to keep options traders busy ahead of the next catalyst.
Traders are focused on the Fed’s Wednesday decision and the upcoming batch of Big Tech earnings to gauge how much longer the AI trade can last. Cloudflare’s spotlight moves to its Feb. 10 earnings, looking for clues that agentic-AI traffic is starting to convert into paid network usage.
