NEW YORK, Feb 23, 2026, 15:44 (ET) — Regular session
- Cloudflare shares slid roughly 9.6% in afternoon trading, trailing several of its peers.
- U.S. software stocks lost ground, pressured by fresh tariff jitters and a shift to risk-off trading—driving the decline.
- Cloudflare’s post-quantum security update drew focus, while a recent outage tied to BYOIP also put reliability in the spotlight.
Cloudflare dropped roughly 9.6% to close at $160.11 on Monday. Shares kicked off the session at $174.84 and bounced between $178.95 and $159.19 through volatile trading.
U.S. stocks lost ground, software shares faring worst as traders wrestled with heightened tariff jitters triggered by a Supreme Court decision and the latest trade warnings. “This looks like a resumption of the AI disruption selloff,” said Ross Mayfield, investment strategy analyst at Baird, noting the sector was already on its back foot ahead of a packed tech earnings slate, with Nvidia due up Wednesday. Reuters
Cloudflare kicked off Monday with its own headline, rolling out what it’s calling “the world’s first complete” secure access service edge, or SASE, platform. This new offering comes with post-quantum encryption support in all major configurations. SASE bundles networking and security tools via the cloud, while post-quantum encryption is designed to shield data from future advances in computing power. CEO Matthew Prince put it simply: the aim is to make post-quantum security “the default… with no added cost.” Cloudflare
Investors continued to sift through Cloudflare’s explanation for the Feb. 20 outage affecting some customers on its “bring your own IP” service. The company pointed to a network change that accidentally withdrew customer prefixes, emphasizing the incident “was not caused… by a cyberattack.” The Cloudflare Blog
The company reported a six-hour, seven-minute outage, with some users able to bring services back online after re-advertising IP addresses in Cloudflare’s dashboard. According to IT Pro, referencing Cloudflare’s own updates, those affected faced a routing quirk called “BGP path hunting.” Visitors to Cloudflare’s 1.1.1.1 resolver site ran into 403 errors, but DNS resolution on the 1.1.1.1 public resolver itself stayed up. IT Pro
Fastly dropped around 5.5%, with Zscaler down a sharper 11.1% for the day. Akamai, on the other hand, climbed roughly 4.1%. The moves show a choppy appetite for risk among web infrastructure and security stocks tied to Cloudflare.
Cloudflare, known for its suite of security, performance, and connectivity offerings for businesses managing websites, applications, and APIs, has been making moves further into the enterprise networking and “zero trust” security space. Reuters
Even so, there’s space for a reversal here. High-multiple software stocks can take a hit fast in a risk-off environment, no matter what’s happening on the product front. If reliability stumbles crop up, customers may press harder on issues like redundancy, service-level guarantees, or the price of support—turning those topics into potential headaches.
Traders split their focus for the week: tariffs and tech earnings on one side, Cloudflare’s upcoming news on the other. According to its status page, Cloudflare plans maintenance at its Portland (PDX) data center for Feb. 25 and Feb. 26. The company is also set for the Baird Silicon Slopes Conference on Feb. 26.
