Following a huge run-up in its stock price that sent shares from $21.50 at the beginning of the year to levels as high as $117.79 in early August, shares of edge computing company Fastly (NYSE:FSLY) cooled off a bit, falling to levels in the $70s just a few weeks ago.

With so much volatility, many investors are likely wondering where Fastly shares can go next. One analyst is betting the growth stock could head back to $100 over the next year, citing Fastly's potential to continue gaining market share in the fast-growing edge computing market.

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The path to $100

On Monday, Raymond James analyst Robert Majek upgraded his rating for Fastly shares from "market perform" (the equivalent of a hold rating) to "outperform" (similar to a buy rating). In addition, Majek put a $100 12-month price target on the stock.

The boosted price target follows a discussion with Fastly CFO Adriel Lares and some industry research. This due diligence has Majek more optimistic about the company's ability to gain market share. The company's edge computing platform boasts "top-notch performance," and Fastly's programmable-edge offering is differentiated from competition thanks to being built specifically for developers, Majek said.

Majek also came away more bullish on Fastly's upcoming launch of a serverless compute environment called Compute@Edge, which is currently in a private beta.

Fastly's big gains in 2020 are justified

For investors new to Fastly, the stock's massive gain this year may solicit a skeptical eye. But a closer look reveals that the stock's move higher is well deserved.

The tech company's business has been picking up significant momentum this year, partly driven by increased internet traffic because of COVID-19, but also because its customers include many innovators that are growing rapidly and are giving Fastly more of their business. The stock's momentum really took off after management guided for far better second-quarter and full-year revenue growth than analysts were expecting. The company followed through on its rosy outlook by delivering 62% year-over-year revenue growth in Q2 -- exceeding its own guidance and analysts' expectations. 

Looking ahead

Majek's big expectations for Fastly's business align with management's view. When the company reported its second-quarter results, management lifted its full-year revenue outlook for 2020 again, guiding for $290 million to $300 million in total revenue, up from $200 million in revenue last year. The midpoint of this guidance range implies impressive 47% growth over 2019.

Further, management said in the second-quarter update that the company is on track to expand the availability of Compute@Edge in November, giving Fastly's business a significant catalyst headed into next year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.