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Centralized Web Vulnerability: Cloudflare Disruption Impacts 20% of Traffic, Alarming Investors

Centralized Web Vulnerability: Cloudflare Disruption Impacts 20% of Traffic, Alarming Investors

Bitget-RWA2025/11/19 02:14
By:Bitget-RWA

- Cloudflare's 2025 outage disrupted 20% of global traffic due to a configuration error, affecting major platforms like X and Spotify . - Shareholder Baillie Gifford reduced its stake by 14.4% amid valuation concerns, selling $781.5M worth of shares. - The incident triggered a 3.9% stock drop, highlighting investor fears over operational resilience and systemic risks. - Critics warned of centralized infrastructure vulnerabilities, urging redundancy measures like multi-CDN architectures. - Cloudflare pledge

On November 18, 2025, Cloudflare Inc. (NET) experienced a major worldwide outage caused by an internal configuration mistake, which interrupted services for leading platforms like X, ChatGPT, Spotify, and Shopify. The company

that led to widespread 500 errors throughout its network, affecting the dashboard, API, and essential infrastructure. By late afternoon, , but higher error rates continued as teams worked to bring systems back to stability. The outage, impacting close to 20% of global web activity, that depends on centralized service providers.

This event coincided with a strategic adjustment by Baillie Gifford, a significant

stakeholder, which in late September 2025. The firm sold 3,676,391 shares at $214.59 apiece, reducing its position to 21,848,740 shares, or 3.52% of its total portfolio. This decision, , signals a broader reevaluation of Cloudflare’s market worth, with shares trading at $210.6—about 67% higher than its GF Value of $126.99. Analysts observed that this reduction fits Baillie Gifford’s long-term approach of focusing on undervalued investments, though the outage may have intensified worries about Cloudflare’s operational strength.

Financial markets responded quickly to the outage, with Cloudflare’s stock dropping 3.9% in premarket trading,

that has seen the share price fall 24% from its all-time high of $260 in October. The decline followed a 4% dip the previous day, sparking concerns about investors’ faith in the company’s ability to handle systemic threats. The outage also , such as Arbiscan and BitMEX, underscoring Cloudflare’s essential function in protecting decentralized finance (DeFi) networks.

Centralized Web Vulnerability: Cloudflare Disruption Impacts 20% of Traffic, Alarming Investors image 0

The incident reignited discussions about the risks of concentrating internet infrastructure among a few key providers. Cloudflare, which

, acts as a reverse proxy for nearly one-fifth of all websites, boosting performance and blocking harmful traffic. Critics warn that this level of centralization creates critical points of failure, as demonstrated by recent outages at Amazon Web Services and now Cloudflare. The company clarified that the disruption was caused by an internal error, not a cyberattack, and .

Following the outage, Cloudflare revealed it would speed up efforts to strengthen system reliability, including improvements to its configuration management processes. The company also

while addressing the issue. At the same time, and additional safeguards, such as multi-CDN strategies and transparent, open-source reviews after incidents, to help prevent similar problems in the future.

The consequences of the outage went beyond technical setbacks, influencing both investor attitudes and regulatory attention. With Cloudflare’s market value at $73.77 billion, even short-lived disruptions can have major financial impacts, especially for investors like Baillie Gifford who

. As Cloudflare works to fully restore its services, its ability to address underlying systemic issues will be crucial for maintaining the confidence of both clients and shareholders.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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