FSLY Should I Buy
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Fastly Inc (FSLY) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company has demonstrated strong financial performance in Q4 2025, with significant revenue growth and improved profitability. Additionally, the recent surge in stock price reflects strong market confidence, and the bullish technical indicators support a positive price trend. Despite some risks, such as overbought RSI and potential corporate governance concerns, the overall outlook is favorable for long-term growth, especially with its positioning in AI-driven traffic and security.
The technical indicators for FSLY are bullish. The MACD is positive and expanding, indicating upward momentum. The RSI is at 92.255, suggesting the stock is overbought. Moving averages are aligned in a bullish pattern (SMA_5 > SMA_20 > SMA_200). Key resistance levels are at R1: 15.568 and R2: 17.926, with the stock currently trading above R1, indicating strong upward momentum.
Fastly reported strong Q4 2025 earnings, with revenue up 23% YoY and adjusted EPS exceeding expectations.
Significant growth in AI-driven traffic and security revenue, positioning the company well for future AI-related opportunities.
Analysts have upgraded the stock, with William Blair highlighting it as an 'underappreciated play' on AI growth.
The stock surged 72% following earnings, reflecting strong investor confidence.
RSI indicates the stock is overbought, which may lead to short-term price corrections.
Halper Sadeh LLC's investigation into potential breaches of fiduciary duties could impact corporate governance and shareholder trust.
Some analysts remain cautious, citing pricing pressure in the core CDN business and the need for sustained operational improvements.
Fastly's Q4 2025 financials showed strong revenue growth of 23% YoY to $172.6 million, with adjusted net income of $20.1 million. Gross margin improved to 61.39%, up 14.96% YoY, indicating better profitability. However, net income and EPS declined YoY, reflecting some challenges in overall profitability.
Analyst sentiment is mixed but improving. William Blair upgraded the stock to Outperform, citing strong AI-driven growth potential. KeyBanc and Piper Sandler raised price targets, reflecting optimism about the company's positioning in AI and enterprise software. However, DA Davidson and Citi maintain Neutral ratings, with concerns about pricing pressure and the need for sustained performance.
