Fastly, Inc. (NASDAQ:FSLY) is seeking to become more than a content delivery network. At its Investor Day event on September 22, the company highlighted a platform strategy built around delivery, security, compute, and observability.
The timing of this strategy couldn’t be better. AI-generated traffic is creating a new source of demand for infrastructure capable of managing machine-driven requests.
Fastly’s infrastructure is already appearing in AI-agent traffic. An Odd Diligence analysis of tests involving Meta’s Muse assistant found Fastly in 29.3% of tests. That’s a significant share of the tested requests, and it suggests Fastly may play a meaningful role in at least some Muse agentic workloads
Investors also appeared encouraged by the company’s long-term vision. Following Investor Day, Fastly shares jumped 14% after management outlined a path toward double-digit annual growth. Here’s a closer look at the announcement.
Recent operating results indicate that Fastly’s platform strategy is already gaining traction. Q2 revenue increased 23% YoY, with net revenue retention rising to 117%, from 113% in Q1. Remaining performance obligations increased 38% to $341 million.
Platform Adoption Is Accelerating. That’s a Channel to Higher Wallet Share, Stronger Retention
Perhaps the most significant takeaway from Fastly, Inc.’s latest Investor Day was the accelerating multi-product adoption. Fastly said that 72% of its customers now use at least two product suites, up from 58% two years ago. And 30% of customers use four or more suites, up from 7% just two years ago.
For Fastly, deeper adoption increases wallet share and strengthens retention. Also, it supports more diversified and predictable revenue.
That matters because AI can expand the amount and complexity of traffic flowing through Fastly’s infrastructure. Fastly’s research found that AI traffic grew roughly 6.5 times faster than human traffic between January and May 2026. More than half of AI requests required origin access, compared with less than 9% of human requests.
Fastly is responding by expanding beyond simply delivering that traffic. On September 21, it launched AI Runtime Control, AI Firewall, and new API Security capabilities. These are designed to allow customers to govern model access, control AI-agent interactions with APIs, and protect AI applications from attacks such as prompt injection.
More AI traffic expands opportunities for Fastly to sell multiple products around the same workload. The Q2 results offer some early support for that model. Security revenue grew 43%, and Compute-related revenue helped drive 69% growth in the company’s smaller “Other revenue” category.
The 2029 Targets Raise the Bar for Execution
Fastly, Inc. expects its platform strategy to achieve much. The company targets $1.1 billion to $1.3 billion of revenue in 2029. That represents a 14% to 21% annualized growth rate from 2026. It targets 67% to 71% gross margins, 20% to 22% operating margins, and 12% to 15% free cash flow margin.
These are ambitious targets. Fastly expects deeper customer adoption, market-share gains, and AI opportunities to contribute to growth.
The risk therefore is not whether AI traffic will grow. It’s whether Fastly can monetize that growth faster than infrastructure costs and competition erode the opportunity. Cloudflare and hyperscalers remain significant competitors.
Hedge Funds Sentiment Not Settled
At the end of Q2, there were 28 hedge funds holding Fastly, Inc.. That was down from 41 funds in Q1 and 37 funds in Q4 2025. While the overall fund count decreased in the latest quarter, some major funds either increased their stakes or established new positions. D.E. Shaw increased its stake 153% to take the top spot with more than 6.6 million shares.
That mixed investor positioning makes the operating trajectory more important than any single institutional move.
Fastly’s Investor Day data suggest the company is building toward turning AI into a catalyst for platform adoption, not just simply another source of network traffic. The company’s 2029 targets provide a benchmark against which execution can be measured.
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