Fastly stock jumped to $31.3 this week, reaching its highest level since May 6 as investors cheered its presentation and the recent launch of its AI firewall product. It has jumped by over 88% from its lowest level in July. So, will this rally continue?
Fastly demand to rise amid AI agent boom
Fastly is a top software company that is used by some of the biggest firms globally. Its top clients include companies like the New York Times, Stripe, The Guardian, and Github.
The company’s main product is the CDN that helps companies to deliver their websites seamlessly globally. Its platform is also essential in ensuring website security by protecting customers from bots.
This demand will likely continue rising in the coming years now that many AI companies are launching their AI agents.
Fastly has also launched a new AI firewall and AI runtime control to secure and scale AI. The solutions will help companies and other organizations govern AI model access and usage, protect AI apps, and control how AI agents access enterprise APIS.
The AI Runtime control routes model calls through a single endpoint, while the AI firewall protects AI applications. API security, enforces AI contracts, applying consistent rules to agentic, agent-assisted, and conventional traffic.
The most recent results showed that Fastly’s business continued rising in the second quarter. Its revenue jumped by 23% to $183 million, driven by its network services. Most notably, its remaining performance obligations (RPO) rose by 38% to $341 million.
Top analysts believe that Fastly’s revenue has more room to grow in the near term. The average estimate among analysts is that Fastly’s annual revenue will be $740 million, up by 19% from a year earlier. Its revenue will then jump to $846 million next year, with its earnings per share (EPS) rising to 53 cents this year and 63 cents in 2027.
The challenge, however, there are signs that Fastly’s shares have moved much higher than what analysts expect. Kyro data shows that the average estimate among analysts is $19.45, down by about 31% from the current level. RBC Capital has a target of $28, lower than the current $30. The same is true with other analysts, including companies like Piper Sandler, KeyBanc, Canaccord Genuity, and Citigroup.
Fastly stock price technical analysis
FSLY stock chart | Source: TradingView
The daily chart shows that the FSLY stock has rebounded from the double-bottom low of $15.70 to the current $30. It has soared above the 23.6% Fibonacci Retracement level. Also, it has moved above the first support of the Andrews pitchfork tool.
Fastly has also remained above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls have prevailed. It is also hovering at an important level, which aligns with the highest level in August.
Therefore, the stock will likely continue rising, especially when it clears the key resistance level at $30. If this happens, the next key level to watch will be at $34.77, its highest level in April.
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