Cloudflare price target lowered to $225 from $275 at Truist

Core Viewpoint - Truist has lowered the price target for Cloudflare (NET) to $225 from $275 while maintaining a Buy rating, indicating a cautious yet optimistic outlook for the cybersecurity sector in Q4 [1] Group 1: Company Insights - Cloudflare's price target adjustment reflects a broader research note on the cybersecurity sector, which is expected to report strong performance in calendar Q4 [1] - The firm anticipates that companies will adopt a conservative approach for guidance, potentially leading to a "beat-and-raise" trend for 2026 [1] Group 2: Industry Trends - Conversations with IT budget holders and software sellers suggest that demand and the macro environment remain stable, with ongoing momentum in Security & AI initiatives [1] - Despite the positive outlook, software equities are facing significant pressure as investors shift focus towards AI hardware, contributing to a decline of approximately 7% in the IGV – iShares Expanded Tech-Software Sector ETF in the early weeks of trading [1] - Concerns regarding AI-driven competitive disruption, slow monetization of AI features, prolonged high interest rates, and geopolitical shocks are impacting the sector [1]