Cloudflare (NET) is uniquely positioned for the artificial intelligence era as its existing platform already supports AI agent development and deployment, RBC said in a note Tuesday.

As chipmakers serve as the "picks and shovels" of AI infrastructure, Cloudflare is becoming key infrastructure for the software layer of agentic AI, while also expanding opportunities through initiatives like its Act 4 pay-per-crawl model, RBC said.

"As such, Cloudflare remains a top idea that we believe remains insulated from broader AI risk and is rather an AI leader," the analysts said.

The company delivered an "impressive" Q4, backed by its strongest go-to-market performance in years, solid traction from pool of funds deals, growing adoption of Workers as a developer platform, and increasing benefits from agentic AI deployments, the analysts added.

Revenue and earnings per share beat expectations, with revenue growth accelerating for the third straight quarter to 34%, up from 31% last quarter and the highest level since Q1 2023. Full-year 2026 revenue guidance also came in ahead of expectations at about 28.7% growth at the midpoint, though earnings guidance was slightly lower due to increased investment, the analysts said.

RBC raised its price target on Cloudflare to $240 from $230 while keeping its outperform rating.

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