William Blair has moved Fastly Inc. (NASDAQ: FSLY) up one notch on its rating scale, elevating the stock from Market Perform to Outperform. The analyst house framed the upgrade around Fastly’s potential as an "underappreciated play" on the expanding use of large language models (LLMs) and the emergence of agentic AI, areas the firm says are already contributing to higher traffic volumes across content delivery networks (CDNs).
The firm pointed to a recent quarter it described as a "stellar quarter" for Fastly, and noted that momentum is visible in the stock’s market performance - a 16.96% gain in the past week and a 35.91% rise over the previous six months. Fastly shares are trading at $9.31, and InvestingPro Fair Value estimates indicate the shares may be undervalued. The upgrade comes as three analysts have revised earnings expectations for the company upward.
William Blair highlighted changes in customer behavior as evidence of shifting demand: clients are committing to larger, broader deals that span network delivery, security and compute services as their AI needs evolve. Those contract expansions reflect customers’ need to support AI-driven traffic that frequently reaches out to many websites for search and deep reasoning tasks, which in turn drives volume surges to CDNs and can push customers into higher spend tiers.
The firm also emphasized Fastly’s role in helping customers secure their AI agents. Specifically, it described Fastly’s capability to distinguish between beneficial bot traffic - the automated requests that serve product features - and harmful activity such as scraping or distributed denial-of-service attacks. William Blair sees this capability, alongside Fastly’s performance and reliability advantages, as a competitive differentiator that has supported market share gains.
On the financial side, William Blair noted that Fastly reported revenue growth of 9.45% over the last twelve months, is operating with a moderate debt load, and carries a "FAIR" overall financial health score. The firm called out Fastly’s recent quarterly financials as further evidence of positive momentum.
Fastly’s fourth-quarter 2025 results showed earnings per share of $0.12, doubling consensus expectations of $0.06. Revenue for the quarter was $172.6 million, ahead of the $161.36 million analysts had forecast and representing a 23% increase from the prior year. Those results exceeded analyst projections and were followed by a positive market reaction, according to the company’s reported updates.
Taken together, William Blair’s upgrade, the revised analyst estimates and the stronger-than-expected quarterly results form the basis for the firm’s more bullish view. The firm specifically framed the call as a reflection of Fastly’s exposure to AI-driven traffic volumes and to customers consolidating broader network, security and compute requirements with providers like Fastly.
Context and implications
The upgrade underscores how demand patterns tied to LLMs and agentic AI - particularly activities that require search and deep reasoning across multiple web resources - are reshaping traffic profiles for CDNs. According to William Blair, these AI workloads can materially increase request volumes to websites, pressuring customers to scale and pay more as usage grows. Fastly’s product positioning around bot management and secure delivery is central to the thesis supporting the Outperform rating.