Fastly Slides After Investor Day Despite 138% Year-to-Date Gain

Fastly shares fell about 7% in Wednesday morning trading, to around $24.25, after a two-session slide that began at the company’s September 22 Investor Day. The stock remained up 138% for the year, leaving investors to weigh a sharp rally against the company’s longer-term promises.

Fastly set a 2029 revenue target of $1.1 billion to $1.3 billion. That implies annual growth of 14% to 21% from 2026, with non-GAAP operating margins of 20% to 22% and free-cash-flow margins of 12% to 15%.

Those targets are not guaranteed results. They also extend several years ahead, so investors will need to see progress in upcoming results before judging whether the plan supports the share price.

The near-term outlook is more concrete. Fastly forecast 2026 revenue of $732 million to $746 million, after second-quarter revenue rose 23% year over year to $183.3 million. The company also reported a 117% net retention rate, a measure of how spending by existing customers changes over time.

There is a risk to watch in that customer base: Fastly’s 10 largest customers accounted for 37% of second-quarter revenue, up from 31% a year earlier. Heavy reliance on a relatively small group can make growth more vulnerable if major customers reduce spending.

The company is also trying to turn interest in artificial intelligence into sales. Fastly launched AI Firewall and AI Runtime Control on September 21, saying its AI traffic grew 6.5 times faster than human traffic from January through May. That points to rising use, but does not yet show how much revenue the new products will generate.

The key question for shareholders is whether Fastly can turn its product expansion and customer growth into steady revenue and stronger cash generation. A pullback after a big run is not, on its own, proof the business has weakened; upcoming results will show whether the 2029 targets are gaining support from quarterly performance.