Please ensure Javascript is enabled for purposes of website accessibility

Why Fastly Stock Gained This Week

By Evan Niu, CFA - Jun 11, 2021 at 11:37AM

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

The content delivery network (CDN) specialist experienced a service outage that could tarnish its reputation but that deepens its relationship with Apple.

What happened

Shares of Fastly (FSLY -0.63%) have enjoyed a strong week, having gained 14% as of 11:55 a.m. EDT on Friday. Here's all the news for the content delivery network (CDN) specialist from the week.

So what

Fastly experienced a service outage on Tuesday that took down broad swaths of the internet, but investors were impressed with the company's ability to respond quickly and fix the underlying issue in less than an hour. The technology company subsequently said that the problem was triggered by a single customer who had changed configuration settings.

Stock chart going up

Image source: Getty Images.

"Even though there were specific conditions that triggered this outage, we should have anticipated it," Fastly engineering and infrastructure exec Nick Rockwell said in an update around the incident. "We provide mission critical services, and we treat any action that can cause service issues with the utmost sensitivity and priority."

Oppenheimer downgraded Fastly from outperform to perform on Thursday over concerns that the outage could cause customers to switch CDN providers, since switching costs are relatively low.

Now what

Separately, Apple kicked off its annual WWDC developer conference this week, unveiling a new privacy feature that routes traffic using private relay technology in order to protect user identity and reduce the risk of personal information being leaked. Streaming media analyst Dan Rayburn confirmed that Apple will tap Fastly, Akamai, and Cloudflare to power the new feature. However, the monetization and revenue potential associated with facilitating private relay is minimal, according to Rayburn.

Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple, Cloudflare, Inc., and Fastly. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. 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
$11.11 (-0.63%) $0.07
Apple Inc. Stock Quote
Apple Inc.
AAPL
$174.15 (-0.23%) $0.40
Akamai Technologies, Inc. Stock Quote
Akamai Technologies, Inc.
AKAM
$96.80 (1.13%) $1.08
Cloudflare, Inc. Stock Quote
Cloudflare, Inc.
NET
$73.04 (-1.97%) $-1.47

*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
394%
 
S&P 500 Returns
127%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

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.