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Tue, June 6 at 7:00PM ET

Why Is Fastly (NYSE:FSLY) Stock Up 24% Today?

  • Fastly (FSLY) stock is soaring after Bank of America carried out a rare double upgrade of the shares.
  • The bank is bullish on changes that Fastly’s new CEO is making.
  • FSLY stock can rally in the medium term and the long term.
FSLY stock - Why Is Fastly (NYSE:FSLY) Stock Up 24% Today?

Source: Pavel Kapysh /

Fastly (NYSE:FSLY) stock is soaring 24% on much higher-than-average volume after Bank of America raised its rating of FSLY stock two notches this morning. Fastly operates a content delivery network or CDN. The latter term refers to servers that enable internet content to be quickly transferred.

Bank of America’s Upgrade

The bank upgraded FSLY stock to “buy” from “underperform.” The firm also raised its price target on the company to $16 from $10.50.

According to Bank of America, Fastly’s “underlying fundamentals” are “solid,” while its recently hired CEO, Todd Nightengale, has improved the company’s prices and products. After becoming Fastly’s CEO in September, Nightengale has pushed the company to concentrate on areas in which it has competitive advantages, while also increasing its focus on internet security.

My Past Commentary on Fastly

In 2020, I was very bullish on FLSY stock, citing, among other points, its innovations that made its CDN more friendly to developers than its competitors’ offerings and the many positive reviews that it received from users.

However, amid fears about the U.S. cracking down on one of Fastly’s key customers, TikTok, the collapse of growth stocks within the tech sector, and a widely publicized outage of the company’s network in June 2021, FSLY stock tumbled.

Specifically, today the shares are changing hands for around $12.20, versus the stock’s all-time high of nearly $110 that was set in January 2021. Obviously, my bullish take proved to be incorrect, to say the least.

The Outlook of FSLY Stock

Today, however, Fastly’s trailing price-sales ratio is a reasonable 2.9. Bank of America reports that the company’s fundamentals are “solid,” and it states that the company is moving in the right direction.

Moreover, I assume that FSLY is still using the same top-notch technology that users raved about back in 2020. And the Street is becoming less bearish about rapidly growing tech names. Consequently, I would not be surprised to see FSLY stock rally in the weeks and months ahead.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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