Shares of internet infrastructure technologist Cloudflare (NYSE: NET) had a monster run-up in 2020 — the stock has gained 360% with just a week remaining in the year. To put that in perspective, the company started 2020 with a valuation of just over $5 billion. Now, it’s worth over $25 billion.
As a result of that rapid appreciation, Cloudflare stock is undeniably “expensive” now by many valuation metrics, but I wouldn’t be quick to call this a bubble, or suggest that the shares are to be avoided. As we head into 2021, it’s worth reviewing this disruptive tech outfit to see why so many investors are willing to pay such a steep premium for it.