There doesn't appear to be any business-specific news behind the gains, but investors are warming back up to growth-dependent technology stocks, and Fastly is benefiting from the momentum. The tech-heavy Nasdaq Composite index is up roughly 0.7% today as of this writing and has set a new record intraday high.
Tech stocks are rallying as Treasury bond yields have dipped and concerns about sustained inflationary pressures have eased, and Fastly stock has been enjoying strong rebound momentum since hitting a 52-week low in May. The company's first-quarter earnings report arrived with disappointing guidance last month and prompted steep sell-offs, but the edge-computing specialist still has big potential for expansion, and investors have been pouring back into the stock.
Even with recent gains, Fastly trades down roughly 55% from the lifetime high that it hit last year. The company has a market capitalization of roughly $7.1 billion and is valued at approximately 18.5 times this year's expected sales. That growth-dependent valuation suggests that the stock could see some volatile swings in conjunction with market momentum and business news, but it could offer attractive substantial upside for risk-tolerant investors who take a buy-and-hold approach.
The edge-computing market still has big room for growth over the long term, and tech trends including 5G, the Internet of Things, and augmented reality could prove to be substantial demand catalysts. Fastly isn't the only player in the space, but the overall market is growing at a rapid clip and should be able to support multiple winners, and the company has established itself as a leading service provider.