What happened

Shares of Fastly (FSLY 2.87%) jumped by as much as 7.3% on Thursday morning, goosed by a bullish analyst report.

So what

Oppenheimer analyst Tim Horan upgraded Fastly from perform to outperform early Thursday, indicating that he expects the content delivery network operator to beat the market over the next year or so. Horan set his target price for the stock to $125 per share, 28% above Fastly's closing price on Wednesday.

A blue Ethernet cable twisted into a cloud shape.

Image source: Getty Images.

Now what

Horan said that his channel checks suggested record-level network traffic and a successful launch of Fastly's serverless edge computing service, compute@edge. He also argued that its stock deserves to trade at the same valuation levels as its peer Cloudflare (NET 3.77%), which commands price-to-sales and price-to-book ratios more than 50% above Fastly's.

I found myself nodding along with Horan's analysis, which assumes that consumers around the world have gotten used to more responsive e-commerce and streaming media services during the pandemic. Fastly's unique combination of high-quality edge computing and content delivery services should remain in high demand for years to come.