Shares of Fastly slid 10.1% to $26.66 on September 24, erasing most of the prior session's 13.7% surge, as investors cashed in gains following an Investor Day that promised big things by 2029 but offered no new near-term catalysts. The selloff cut into a 164% year-to-date run , raising a pointed question: how much credit should the market give a company still losing money for targets three years away?
The Targets Sound Great — But the Starting Point Is Shaky
Management laid out 2029 goals of $1.1 billion to $1.3 billion in revenue (a 14%–21% annual growth rate), gross margins of 67%–71%, operating margins of 20%–22%, and free-cash-flow margins of 12%–15%. The problem? Fastly currently posts a negative operating margin of roughly 12% and a free-cash-flow margin of just 2.7%. That gap means the company must nearly quadruple its cash-generation efficiency — a leap that demands years of flawless execution.
AI Traffic Is Real, But the Revenue Proof Is Still Thin
Machine-generated traffic crossed 50% of Fastly's network volume in July and August, and AI traffic grew 6.5 times faster than human traffic earlier this year.
A viral analysis also showed Fastly handles roughly 29% of Meta's Muse AI assistant traffic , a detail that partly fueled Tuesday's rally. Yet Q2 revenue was $183.3 million, and full-year 2026 guidance sits at about $739 million — still modest for a stock trading at a price-to-sales ratio of 6.79, well above its historical median of 4.63.
Insiders Are Selling, Not Buying
Over the past 12 months, insiders sold $74.6 million in shares with zero insider purchases. When the people closest to the business are lightening up during a triple-digit rally, outside investors should note the signal.
The Broader Market Made It Worse
Rising Treasury yields — the 10-year hit its highest level since 2007 — punished growth stocks across the board. But Cloudflare and Datadog held flat, isolating the selloff squarely on Fastly and suggesting the profit-taking was company-specific, not sector-wide. Q3 earnings are now the next proving ground , where management must show the 2029 vision translating into quarterly results.