Cloudflare, Inc. (NET) saw its shares drop 5.26% in pre-market trading following a service outage that disrupted access to its dashboard and related APIs, affecting major platforms like Coinbase, Shopify, and Zoom. The outage, which occurred early Friday, was resolved within hours, but not before causing significant inconvenience to users and sparking investor concerns.

The incident was caused by a change in how Cloudflare's firewall handles requests, implemented to mitigate a vulnerability in React Server Components. This marks the second such outage in less than a month, raising questions about the reliability of centralized infrastructure services. Cloudflare's shares initially fell as much as 6% in pre-market trading but later pared some losses after the company confirmed the issue was resolved.

Cloudflare's software is widely used by businesses globally to protect against traffic overload attacks, making outages particularly disruptive. The company has faced similar issues in the past, including a major outage in June 2022 that affected 19 data centers. Investors are closely monitoring the company's efforts to improve redundancy and prevent future incidents.