TLDR
- Fastly (FSLY) stock jumped 14% on Wednesday following its investor day event in New York.
- Management issued new 2029 targets, including revenue of $1.1 billion to $1.3 billion.
- AI traffic on Fastly’s platform is growing 6.5 times faster than human traffic.
- Fastly launched AI Firewall and AI Runtime Control to protect customer AI systems.
- RBC Capital kept a Sector Perform rating and $25 price target, citing a wide guidance range.
Fastly (FSLY) stock climbed 14% on Wednesday, closing at $29.65 after the company’s investor day sent buyers rushing in. The move capped a volatile week for the edge computing company, which had actually dropped about 5% on Tuesday when it first unveiled its long-term targets.
The swing shows just how split Wall Street is on this stock right now. Some investors like what they heard. Others are still waiting for proof.
Fastly’s pitch is simple. Its platform bundles content delivery, cybersecurity, and edge computing into one package that helps websites run faster and cheaper. Now the company wants a bigger slice of the AI boom too.
At the investor day, Fastly said AI traffic on its network is growing 6.5 times faster than regular human traffic. That’s a big number, and it’s central to the company’s growth story going forward.
New Targets for 2029
Management laid out fresh financial goals for fiscal 2029. Fastly expects revenue between $1.1 billion and $1.3 billion, which works out to annualized growth of 14% to 21% from 2026 onward.
The company also targets a gross margin of 67% to 71% and an operating margin of 20% to 22%. Free cash flow yield is expected to land between 12% and 15%.
Cross-selling is a key part of the plan. Fastly says 30% of its large customers already use four or more of its products, and it wants that number to climb.
On the security side, Fastly rolled out two new tools this week: AI Firewall and AI Runtime Control. Both are designed to help customers monitor and protect their own AI systems as adoption grows.
The company is also riding a wave from Meta Platforms’ new AI agent, Muse. Fastly reportedly handles a sizable chunk of the traffic Muse generates, giving it a direct line to one of the year’s most talked-about AI products.
Analysts Stay Cautious
Not everyone is convinced yet. RBC Capital reiterated its Sector Perform rating and $25 price target after the event, pointing to Tuesday’s selloff as a sign investors weren’t fully sold on the wide 2029 revenue range.
RBC did raise its fiscal 2027 estimates, crediting steady content delivery network performance and growing security revenue. But the firm said it wants to see execution before getting more bullish.
Other analysts were more upbeat. Evercore ISI kept an Outperform rating with a $32 price target, pointing to three straight quarters of revenue growth above 20%. Raymond James also stuck with Outperform, noting fiscal 2026 revenue guidance of $732 million to $746 million.
KeyBanc reiterated an Overweight rating and a $30 target, citing margin trends and steady consumption in network services. BofA Securities raised its target to $22 from $20 but kept an Underperform rating, still cautious on valuation.
DA Davidson trimmed its price target to $23 from $26 while maintaining a Neutral rating. The firm flagged valuation concerns even as it acknowledged Fastly’s progress broadening platform adoption.
Fastly’s stock has now more than doubled over the past year. The company expects to turn profitable this year, and 11 analysts have raised their earnings estimates for the upcoming period.
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