Cloudflare (NYSE:NET) shares surged 12% in the morning session following a third-quarter earnings report that significantly exceeded analyst expectations. The company reported Q3 revenue of $782.5 million, surpassing estimates of $736.8 million and representing a 39.2% year-on-year growth rate. Adjusted earnings per share reached 38 cents, topping the consensus of 34 cents, demonstrating strong operational performance. Management raised its full-year adjusted EPS guidance to $1.35 at the midpoint, marking a 7.6% increase from previous projections. For the fourth quarter of 2026, Cloudflare expects sales of $845.5 million at the midpoint, which is above analyst estimates of $795.9 million. This optimistic outlook is driven by management's confidence that its platform is well-positioned for continued adoption amidst growing AI-driven workloads and evolving internet security requirements. The stock's volatility has been notable, with 44 moves greater than 5% recorded over the last year, though this specific rally indicates a significant shift in market perception regarding the business. Despite being up 40.7% since the beginning of the year, shares trade at $275.71, which remains 23.6% below its 52-week high of $360.93 reached in October 2026.