Fastly Shares Jump 14% After AI Security Launch

Fastly Inc. shares increased approximately 14% following an Investor Day where the company launched a new artificial intelligence security suite and established long-term financial goals. The company aims for revenue between $1.1 billion and $1.3 billion by 2029, which would represent a compound annual growth rate of 14% to 21%, with projected operating margins of 20% to 22%. Fastly also reaffirmed its 2026 free-cash-flow guidance of $40 million to $50 million.

To support these financial targets, the company introduced AI Runtime Control, AI Firewall, and API Security tools. These products are designed to govern model traffic and block prompt injections, a move driven by the fact that machine-generated requests exceeded 50% of Fastly network traffic in July and August. The company stated that as enterprise AI shifts from experimentation to business-critical production, the focus turns to leveraging AI safely at scale.

Wall Street analysts offered mixed reactions to the updates. Freedom Capital Markets raised its price target to $37 with a buy recommendation. Conversely, BofA Securities increased its target to $22 but maintained an underperform rating, calling the financial updates lackluster. Other firms, including Royal Bank of Canada and D. A. Davidson & Co., maintained neutral or sector perform ratings with price targets of $25 and $23, respectively.