Why Fastly Stock Plunged 14% on Tuesday

By Anders Bylund – Apr 15, 2026 at 12:15AM ESTKey PointsEvercore started coverage at outperform, pointing to strong demand for edge computing and security tools.Craig-Hallum downgraded Fastly to hold, citing a stock price that already reflects fair value.Fastly stock had gained 345% over the past year before Tuesday's drop.After a spirited round of "dueling analysts," shares of Fastly (FSLY 14.03%) closed 14% lower on Tuesday. One analyst firm issued a bullish report on the stock and another posted a bearish review; many investors agreed with the negative analysis. ExpandNASDAQ: FSLYFastlyToday's Change(-14.03%) $-3.42Current Price$20.95Key Data PointsMarket Cap$3.2BDay's Range$20.68 - $24.5752wk Range$5.13 - $34.82Volume33KAvg Vol14MGross Margin54.40% Dueling analysts can't agree on Fastly Let's start on the bearish side of the fence. Craig-Hallum analyst Jeff Van Rhee downgraded Fastly's stock from "buy" to "hold," with a price target of $24 per share. The stock closed Monday's trading at $24.37, roughly in line with the firm's value projection. Van Rhee noted that Fastly's stock has risen sharply from last September, when the now-defunct "buy" rating was issued. At current prices, the firm doesn't expect much further upside as Fastly wrestles soaring hardware costs. At the same time, Evercore analyst Peter Levine started Fastly coverage at "outperform" with a $32 price target. In Levine's view, massive demand for content delivery and edge computing services outweighs Fastly's lofty valuation. The company's combo of AI computing at the network edge and robust security tools makes Fastly a compelling investment idea in Evercore's analysis. Again, many investors either accepted Craig-Hallum's softer outlook or took some recent profits off the table. As of Monday night, Fastly had gained 345% in 52 weeks. Even now, after a sharp price drop, it's up by 282% in a year. Image source: Getty Images. Why the bears won this round Both analyst firms had some solid points, and it's easy to see why the bearish view was more popular today. Fastly is a turnaround story in progress with new management and questionable financials. 22% year-over-year revenue growth in February's fourth-quarter report is balanced by negative earnings on a trailing twelve-month basis. The stock trades at 75 times free cash flow today, and the incoming AI edge computing orders have some heavy lifting to do. That said, I'm not in a hurry to sell my Fastly shares, because the AI tailwinds are still blowing. Management expects positive adjusted earnings and at least $40 million of free cash flow in 2026.Read NextApr 15, 2026 •By Will Healy3 Genius AI Stocks You'll Regret Not Buying During This Sell-OffApr 15, 2026 •By Keithen DruryThe 3 Best Stocks to Buy in the MarketApr 15, 2026 •By Trevor JennewineSpaceX IPO: History Says the Stock Will Do This When It Starts Trading.Apr 15, 2026 •By Trevor JennewineNvidia Has 74% of Its Portfolio Invested in 2 Artificial Intelligence (AI) StocksApr 15, 2026 •By Harsh ChauhanThe Nasdaq Composite Did This After Hitting a Low in April 2025. Here's What the Index Can Do in 2026 After the Latest Sell-off.Apr 15, 2026 •By Jose NajarroAnthropic Needs More AI Compute -- Here Are My Top 8 Stocks to OwnAbout the AuthorAnders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.TMFZahrimX@TMFZahrimStocks MentionedFastlyNASDAQ: FSLY$20.93(-14.12%)-$3.44*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.