Swarms of artificial-intelligence agents have put pressure on tech companies, but cloud computing firm Fastly is positioned to survive the onslaught, a Wall Street analyst says.
Fastly stock jumped 17% to $29.67 Friday after Oppenheimer upgraded shares to Outperform from Perform with a $35 price target. Analyst Param Singh pointed to Fastly's strong cross-selling of its new cybersecurity products, early monetization from rising artificial-intelligence agent traffic, and a revenue boost from the upcoming release of Grand Theft Auto VI.
Fastly, a cloud company that aims to make websites load faster and stay safe, isn't serving just standard website content anymore. Clients have begun spending more by buying Fastly's newer security tools, while autonomous AI agents and bots have driven a fresh wave of network traffic. Singh anticipates this to push annual growth into the high-teens to low 20s range over the next few years.
While it may be too early to appear heavily in the company's upcoming quarterly earnings, the company's new security offerings, specifically AI Runtime, AI Firewall, and API Enforcement, are expected to drive growth in the fourth quarter and through 2027, the firm wrote. The suite aims to protect enterprises from autonomous AI agents and models.
Surging AI agent traffic in the fiscal third quarter has pushed more clients to adopt Fastly's bot management solutions. This could position Fastly as a major infrastructure beneficiary of AI agent activity over the long term, Singh wrote.
The firm also anticipates the upcoming release of GTA VI in November, developed by Take-Two Interactive Software's Rockstar Games, will add nearly $10 million in revenue upside when users download the game.
Looking ahead, Singh sees some catalysts right around the corner. The firm expects Fastly to hit the top end of its upcoming revenue targets for the fiscal third quarter, ranging from $184 million to $190 million. They also see the company raising its fiscal 2026 forecast when it reports quarterly earnings on Nov. 4.
Though shares have surged 186% this year, Wall Street remains split on Fastly stock. Of the 13 analysts polled by FactSet, 46% rate it an equivalent to Buy while 46% rate it as Hold. The remaining 8% rate the stock an equivalent to Sell.