Please ensure Javascript is enabled for purposes of website accessibility

Why Fastly Stock Jumped Monday

By Daniel Sparks – Jun 1, 2020 at 6:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With companies' digital transformations accelerating as a result of COVID-19 lockdowns, Fastly is positioned to benefit.

What happened

Shares of edge computing company Fastly (FSLY 2.00%) surged on Monday, rising nearly 10% by the time the market closed.

The stock's gain adds to a huge run-up in 2020 as investors continue to cheer the company's recent strong first quarter and management's decision to lift its outlook for the full year. On Monday specifically, shares may have benefited from the company's spotlight on CNBC's Mad Money last Friday, as well as an upbeat day in the market for growth stocks overall.

A diagram of three laptops connecting to a cloud

Image source: Getty Images.

So what

At a time when many companies were suspending their outlook for 2020 amid an uncertain environment, Fastly said in its May 6 first-quarter update (after it reported 38% year-over-year revenue growth) that it was boosting its view for the year. The company forecast 2020 revenue between $280 million and $290 million, up from a previous forecast between $255 million and $265 million.

"Despite the current global economic uncertainty, we remain confident in the demand for our mission-critical services and the continued growth of our business in 2020 and the years to come," Fastly said in its first-quarter shareholder letter.

Many growth stocks were up several percentage points or more on Monday, significantly outperforming a 0.4% gain for the S&P 500. Fastly likely benefited from this broader market move.

Now what

In the interview with Jim Cramer on Mad Money last Friday afternoon, CEO Joshua Bixby explained that COVID-19 lockdowns have changed the fabric of the internet, forcing many companies to look to accelerate their digital transformations. As an edge computing platform built by developers for developers, the company is well positioned to help innovative companies transform digitally.

Daniel Sparks owns shares of Fastly. The Motley Fool owns shares of and recommends Fastly. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Fastly, Inc. Stock Quote
Fastly, Inc.
FSLY
$9.16 (2.00%) $0.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
104%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.