Fastly stock price has staged a strong comeback this month, reaching its highest point since January 22nd.
It has risen in the last five consecutive weeks, and is now up by nearly 500% from its lowest level last year. So, is it safe to buy the stock today?
Fastly stock boosted by rising demand
Fastly, a top CDN company, is doing well and beating other companies amid the ongoing AI-fueled growth.
The most recent results showed that its revenue continued growing in the fourth quarter, with the management guiding towards more growth in the future.
Fastly said that its revenue jumped by 23% to $172.6 million, with its network division making over $130.8 million.
Its security revenue rose to over $35 million, while the other segment made $6.4 million.
The fourth-year revenue growth was much better than what the company made during the year, a sign that its business gained momentum. Its annual revenue rose by 15% to over $624 million.
Fastly’s cost management strategies pushed it to reduce its losses.
It made a net loss of over $121 million in 2025 from the $158 million a year earlier.
Its gross margin also expanded to 57.1% from 54.4% in 2024.
READ MORE: Fastly stock dubbed an ‘underappreciated AI play’ after blockbuster Q4 earnings
Another sign of rising demand is that the company’s remaining performance obligations (RPO), which is often seen as the backlog, jumped by 55% to $534 million.
The number of enterprise customers rose to 628, up by 32%. These companies like Financial Times, Reddit, SpaceX, and the New York Times.
Analysts believe that the company’s business will continue growing this year.
The estimate is that its first-quarter revenue will jump by about 18% to about $174 million.
Its full-year revenue will be between $700 million and $720 million, while its operating income will jump to between $50 million and $60 million.
Still, the main risk is that the company’s valuation has become stretched.
The company’s forward price-to-earnings ratio stands at 90.8, much higher than the S&P 500 Index’s 23.
It is also much higher than that of Nvidia, which has a forward multiple of 22.
The other main challenge is that the CDN industry is highly competitive, with a company like CloudFlare having the biggest market share.
Fastly stock price technical analysis
FSLY stock chart | Source: TradingView
The weekly chart shows that the FSLY stock price bottomed at $5.10, a level it failed to move below several times since 2022.
A closer look shows that the stock remained in the accumulation phase of the Wyckoff Theory.
This phase is usually followed by the markup phase, which is normally characterised by strong demand.
The stock has also formed a cup-and-handle pattern, a common continuation sign.
It recently moved above the upper side of the cup and is now nearing the 23.6% Fibonacci Retracement level.
It has moved above the 50-week Exponential Moving Average (EMA) and is nearing the 23.6% Fibonacci Retracement level.
Therefore, the stock will likely continue rising in the coming weeks, potentially to the 23.6% Fibonacci Retracement level at $35.6. This target is about 26% above the current level.
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