Key Takeaways
- Fastly shares jumped 17% today after Oppenheimer upgraded the stock to Outperform with a $35 price target.
- Oppenheimer expects bigger contracts and early agentic AI traffic to drive high-teens to low-20s growth for the next few years.
- That is faster than consensus, which has revenue growth slowing from 19% this year to 14% in 2027.
- Third-quarter results after the close on Nov. 4 are the next test of whether AI traffic is paying off.
Fastly (FSLY) shares jumped 17% today after Oppenheimer upgraded the stock to Outperform from Perform with a $35 price target.
Two weeks ago, Wall Street was making the opposite argument.
Oppenheimer bets on agentic AI
Oppenheimer analyst Param Singh laid out the call in a note to clients this morning, before the open:
“Our bullish stance is predicated upon our strong industry checks that indicate growing contract values (growing attach of newer security products) and early monetization of agentic AI traffic.”
He expects those trends to “drive high-teens to low-20s growth for Fastly over the next few years.”
That’s a direct answer to the bears. On Sept. 24, Fastly fell 10% after Citi analyst Fatima Boolani argued that AI traffic won’t do much for Fastly’s profits: it bills by the gigabyte, and AI assistants send lots of small, quick requests.
Here’s the thing: half of Oppenheimer’s case doesn’t depend on that billing model. Customers signing bigger contracts for security products pay Fastly more, whoever (or whatever) is sending the traffic.
Growth is already picking up
And the revenue trend backs Oppenheimer up. Fastly’s growth sped up from 8% in 2024 to 15% in 2025, and analysts expect 19% this year…
…but they have it cooling to 14% in 2027 and 15% in 2028. Oppenheimer’s range sits above that, toward the top of the 14% to 21% annual growth management targeted through 2029 on Sept. 22. If its checks are right, those out-year estimates are too low.
Profits come next. Fastly earned $0.13 a share on a normalized basis in 2025 after two years of losses, and analysts expect $0.53 this year:
The bar just got higher
Fastly traded at 47x forward earnings at Thursday’s close, and today’s jump takes it closer to 55x. The $35 target sat nearly 40% above Thursday’s close, and today’s move has used up about half of that.
Still, I think Oppenheimer has the better side of this debate. Fastly’s growth is accelerating, and its security business gives it a way to win that doesn’t hinge on how AI traffic gets billed.
The next test comes with third-quarter results after the close on Wednesday, Nov. 4. Of course, one soft quarter for traffic would hand the argument right back to Citi.
So what is Fastly stock actually worth?
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Disclaimer:
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