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Why Fastly Stock Climbed Today

By Evan Niu, CFA - Jun 8, 2021 at 2:25PM

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The specialist in content delivery networks experienced a brief outage this morning but quickly fixed the problem.

What happened

Shares of Fastly (FSLY 4.98%) climbed today by as much as 8% despite a widespread service outage that temporarily took down broad swaths of the internet. The disruption occurred early on Tuesday morning, causing Fastly stock to dip by as much as 7% in  pre-market trading, before the technology company was able to address the issue. Shares remain volatile and were up just 3% as of 11:30 a.m. EST.

So what

Fastly operates a content delivery network (CDN) that powers many popular websites, including video streaming services like Amazon's Twitch, social media platforms such as Reddit, and more. Fortunately, the outage was brief and Fastly was able to apply a fix less than an hour after the problem was identified. Investors may be impressed with the company's ability to quickly repair the problem.

Stock chart fluctuating

Image source: Getty Images.

"Fastly has observed recovery of all services and has resolved this incident," the company wrote on its status page. 

Now what

It's not uncommon for various parts of the internet's back-end infrastructure to suffer occasional outages, which typically do not affect a provider's overall business fundamentals most of the time. This brief service outage will likely be forgotten in short order.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Evan Niu, CFA owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Fastly. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

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