Cloudflare shares surged after the cloud services and security company reported strong second-quarter results and raised its full-year outlook, helped by growing demand linked to artificial intelligence and increased developer activity.

According to Bloomberg News, the American technology company raised its annual revenue forecast to $2.864 billion to $2.870 billion, up from its previous estimate of $2.805 billion to $2.813 billion.

The company also lifted its full-year adjusted earnings per share (EPS) guidance to $1.25 to $1.26, compared with its earlier forecast of $1.19 to $1.20.

As reported, the company’s shares jumped 16% in premarket trading on Friday after the updated outlook signaled stronger demand for its networking and security products.

The results add to growing evidence that the AI boom is benefiting not only chipmakers but also companies providing the infrastructure and software needed to support AI applications.

CEO Matthew Prince highlighted the changing nature of internet traffic, saying that more than half of the traffic moving across Cloudflare’s network during the quarter was non-human for the first time, driven by autonomous agents, bots and large language model (LLM) workloads.

The American technology company also said it added around 2 million developers in the second quarter alone, exceeding the 1.5 million developers it added during the previous year, as more businesses build applications using AI and cloud-based tools.

Analysts believe the global cloud technology platform is well positioned to benefit from the AI expansion.

TD Cowen said the company could play a major role as AI adoption grows, while Morgan Stanley pointed to its Workers developer platform as a key growth area as customers increasingly shift toward usage-based services.

Beyond AI infrastructure, Cloudflare’s security business is also expected to benefit as companies look for ways to protect AI-powered applications and digital workers from increasingly complex cyber threats.

Revenue for the second quarter rose 36% year over year to $696.1 million, beating Wall Street expectations.

According to earnings report, Cloudflare shares are up more than 44% this year, compared with gains of about 77% for CrowdStrike and 95% for Palo Alto Networks.

The company currently trades at more than 190 times forward earnings, according to LSEG data, compared with over 145 times for CrowdStrike, reflecting investor confidence in Cloudflare’s long-term AI growth potential.