BofA Maintains Skepticism on Fastly Despite Strong Stock Performance
Bank of America (BofA) analysts have maintained a cautious stance toward Fastly ahead of its second-quarter earnings report, assigning it an Underperform rating with a $20 price target. This contrasts sharply with their positive outlook for Akamai and Cloudflare, both receiving Buy ratings. The skepticism stems from BofA's view that Fastly has not yet fully diversified away from its core content delivery business, which still accounts for 73% of first-quarter revenue. Fastly’s stock price has surged nearly 98% year to date as investors bet on the company's transformation into a broader edge cloud provider. However, BofA argues that Fastly's growth remains heavily dependent on its traditional delivery business and that security offerings—while growing—are still not large enough to offset this reliance. In contrast, Akamai has been boosted by a $1.8 billion contract with Anthropic and the acquisition of LayerX, which is expected to enhance cross-selling opportunities in AI usage controls.
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