Why Raymond James says Fastly stock could surge on the AI boom
Investing.com -- Fastly was under the investors’ spotlight on Friday after Wall Street analysts turned bullish on the stock.
Raymond James upgraded Fastly to “Outperform” from “Market Perform,” citing improving operational execution, rising AI-driven traffic demand, and growing momentum in the company’s security business. The brokerage also introduced a $23 price target, implying roughly 18% upside from Fastly’s recent closing price of $19.50.
Analysts said Fastly is benefiting from increasing demand for advanced content delivery and security services as enterprises rethink do-it-yourself CDN strategies amid rising AI and inference-related traffic. Raymond James believes the company’s network infrastructure and edge computing capabilities position it well to capture additional market share.
The brokerage noted that investor concerns following Fastly’s first-quarter 2026 earnings were largely driven by an overextended rally after the prior quarter and misunderstanding around the sustainability of recent improvements. Raymond James argued that the company’s gains stem from structural operational changes rather than a temporary AI-driven boost.
Fastly’s security segment was highlighted as a major growth driver, with analysts forecasting 25% to 30% year-over-year expansion this year, supported by strong cross-selling activity and rising adoption of API security products. Management also reported stronger traction in larger multi-product deals and renewals, areas where Raymond James believes Fastly is gaining share against competitors including Akamai Technologies.
Raymond James raised its 2026 and 2027 revenue estimates to $719 million and $799 million, respectively, while also modestly increasing earnings forecasts. The firm said Fastly’s improving financial flexibility, positive free cash flow generation, and disciplined infrastructure investments further support a more constructive outlook on the stock.