Fastly, Inc. (NYSE: FSLY), a provider of edge cloud delivery, security, and compute services, climbed 6% in pre-market trading on October 9 after Oppenheimer upgraded the company to Outperform from Perform. Shares last traded near $27.88, still 16.8% below the 52-week high of $33.50 reached in April 2026.

Oppenheimer set a price target of $35, which values the stock at seven times estimated 2027 enterprise value to sales — a discount to the 10.6-times peer median. The firm argues that a potential revenue ramp from new products is not yet reflected in the share price.

Analyst Param Singh said the firm's own checks show third-quarter average deal sizes grew, pointing to customers buying more of Fastly's newly launched security tools. Fastly moved its AI Runtime, AI Firewall, and API Enforcement suites to general availability in September, and Oppenheimer sees an unpriced revenue ramp from these products.

The reasoning is tied to agentic AI traffic: as that traffic grows, network volumes rise, and demand for Fastly's bot management tools is expected to follow. How quickly that traffic turns into paying security customers is precisely the question on which the analysts covering the name diverge.

What Oppenheimer Expects

Singh projects third-quarter revenue at the upper end of Fastly's $184 million to $190 million guidance range. He also expects management to lift its full-year 2026 revenue growth outlook to between 20% and 21%. That forecast includes early AI monetization and counts about $10 million in revenue tied to Grand Theft Auto VI.

Over the next few years, Oppenheimer expects high-teens to low-20s growth. The firm believes the market underrates that path and expects the stock to re-rate if management delivers on growth and margin expansion.

Other analysts are taking a more cautious view of the shares. RBC Capital kept a Sector Perform rating with a $25 target after Fastly's investor day. DA Davidson kept a Neutral rating and cut its target to $23 from $26 on valuation concerns. BofA Securities raised its target to $22 from $20, citing Fastly's move toward a unified edge platform and three straight quarters of steady revenue growth. Taken together, the targets now span $22 to $35 — a range that captures the core disagreement over whether AI-driven traffic becomes meaningful revenue soon enough to support a higher valuation.

A Volatile Stock

Fastly has recorded 75 moves greater than 5% over the past year, a level of volatility that makes a 6% pop a fairly normal session for this name. The last big move came 15 days earlier, when the stock fell 4.2% as rising yields pressured tech stocks and investors took profits after the investor day.

The day before that drop, the stock had surged about 14.3% after management laid out long-term financial targets through 2029, including a revenue growth range of 14% to 21%.

DA Davidson has said AI agents could add some traffic for Fastly, but the firm does not expect large revenue gains from it in the near term. Social media chatter has also linked Fastly to traffic from Meta's Muse AI assistant, and that talk has drawn extra attention from traders.

Fastly has not been profitable over the past twelve months, though analysts expect the company to reach profitability this year, and 11 have revised their earnings estimates upward.

The next checkpoint for both the bull and bear cases is Fastly's third-quarter report, where the markers to watch are whether revenue lands at the upper end of the $184 million to $190 million guidance range and whether management formally lifts its full-year growth outlook toward the 20%-to-21% zone Oppenheimer anticipates.

The stock is up 173% since the start of the year and was changing hands near $27.88 in the most recent session. Still, the five-year record remains in the red: a $1,000 investment made five years ago would now be worth $673.67.

Source: CoinCentral