Why Fastly Stock Skyrocketed Today
Key Points
Fastly's content delivery and security services are in high demand.
Management expects more artificial intelligence (AI)-fueled gains in 2026.
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Shares of Fastly (NASDAQ: FSLY) soared on Thursday after the cloud platform's revenue and earnings handily exceeded investors' expectations.
By the close of trading, Fastly's stock price was up a whopping 72%.
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Living on the edge
Fastly's revenue jumped 23% year over year to $172.6 million in the fourth quarter. The gains were driven by a 19% jump in network services sales, to $130.8 million, and a 32% surge in security revenue to $35.4 million.
The content delivery network helps to speed up and protect websites and applications. Fastly's edge computing platform reduces latency by placing data and application logic closer to end users.
These increasingly valuable benefits have Fastly well-placed to profit from the rising adoption of AI agents.
"As the Internet moves into the age of agentic AI, it's clear that the edge will play a pivotal role," CEO Kip Compton said during a conference call with analysts. "Our infrastructure is designed to power this edge intelligent layer, optimizing authorized AI agents and blocking abuse."
All told, Fastly generated adjusted net income of $20.1 million, compared to a loss of $2.4 million in the year-ago quarter. That placed its adjusted earnings per share at $0.12, twice what Wall Street was expecting.
A bullish forecast
Looking ahead to 2026, Fastly expects revenue to grow roughly 14% to $710 million, with operating income of $55 million and adjusted earnings per share of $0.26.
"We anticipate continued momentum, with AI as an increasing tailwind for our business," Compton said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fastly. The Motley Fool has a disclosure policy.
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