Fastly (FSLY) Stock Forecast & Price Target

Fastly is positioned for attractive fundamental upside because AI-agent activity is driving meaningful traffic growth, with management citing an 11x increase in MCP requests in Sep'26 versus Jan '26 and AI requests growing 6.5x faster than human requests. Its platform is gaining broader adoption, as 72% of $100K+ customers now use 2+ product suites and 30% use 4+, while Security revenue rose 42.6% to $41.7M and NRR improved to 117%, signaling strong cross-sell momentum. Profitability is also inflecting, with 2Q26 revenue of $183.3M, non-GAAP EBIT margin expanding to 14.7% from -3.1% in 2Q25, and full-year guidance raised after better-than-expected gross margin and operating leverage.

Fastly is facing a weak fundamental setup because the market appears to be discounting traffic from AI-driven personal agents that may not translate into meaningful incremental demand, with the cited Muse scenario implying only about $16.3M of revenue at full scale versus roughly 2% of projected CY26 revenue. Its core CDN business is vulnerable to sustained price compression and intense competition, especially against Akamai, while security products remain in mature markets where growth depends on displacement rather than broad new adoption. The company is also unprofitable, unlikely to turn profitable near term, and carries meaningful concentration and geographic risk, with the top 10 customers contributing 35%+ of revenue and non-US revenue at about 25-30%.