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Why Fastly Stock Is Rising Today

By Joe Tenebruso - Jun 23, 2020 at 12:06PM

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The cloud computing company is one of the biggest winners from the work-from-home boom.

What happened

Shares of Fastly (FSLY 6.83%) are climbing on Tuesday, as investors grow increasingly excited about the cloud service provider's growth prospects.

As of 11:30 a.m. EDT, Fastly's stock was up more than 10%.

So what

As a cloud-based content delivery network, Fastly is benefiting from the surge in internet traffic during the coronavirus pandemic. With so many people working and shopping from home, Fastly's business is booming.

A person in a business suit is holding an upwardly sloping digital chart.

Fastly's stock is surging as its sales soar. Image source: Getty Images.

Better still, Fastly's growth could accelerate in the quarters ahead. As my colleague Nicholas Rossolillo notes, Fastly could be a big winner from Shopify's new partnership with Walmart. The deal is designed to strengthen Walmart's fast-growing e-commerce operations, by allowing more than 1,000 of Shopify's best-performing merchants to sell their products on Walmart.com. 

Fastly has wisely chosen to focus its efforts on the e-commerce industry, and it counts Shopify as one of its most important customers. Thus, Shopify's partnership with Walmart should also allow Fastly to benefit from the retail giant's surging e-commerce traffic -- Walmart's online retail sales soared 74% in the first quarter -- as well as Shopify's continued expansion.

Now what 

By helping companies deliver their cloud-based content to consumers faster and more securely, Fastly is well-positioned to profit from several powerful trends, including the growth of e-commerce, remote work, and digital entertainment around the world. These are massive and rapidly expanding markets -- and Fastly has long runways for growth still ahead.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Fastly and Shopify. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Fastly, Inc. Stock Quote
Fastly, Inc.
FSLY
$12.04 (6.83%) $0.77

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