Fastly (FSLY 2.55%) and Twilio (TWLO 2.66%) are two exciting growth stocks, but they have very different business models and growth dynamics. In this Motley Fool Live video clip, recorded on Jan. 27, Fool.com contributors Jose Najarro and Rick Munarriz discuss which of the two they'd rather invest in right now.
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Jose Najarro: I do own both. I haven't really added onto them in the recent pullback. But if I had to choose between the two, Twilio. I think the services they provide are creating your own communication applications, and I do believe as, pretty much like I mentioned when we were talking about Facebook and Google, how companies are going to come and go. Businesses are going to open up. Again, close up. Same with applications, numerous applications are going to open up. Some are going to be successful, those that are successful, are going to need things like communicating with their customers, something Twilio really helps out a lot in.
Definitely I like Twilio, haven't really looked at it. Usually I have a higher tiered list and I've been focusing on them. But now I'm actually going to write down Twilio to put it on my list to watch some more.
Rick Munarriz: Just like Jose, I am a bigger fan of Twilio than I'm of Fastly. Twilio is a very successful in-app communication solution. When you're ordering a DoorDash order, or you're looking at an Airbnb, or you're buying something on MercadoLibre, and you're placing these orders, they are going to work for you. In the app, they're checking with the Airbnb owner. They are checking with the merchant to make sure that you're both legit before you changed money.
They are the ones that let you know, your driver is five minutes away. That's Twilio in action. It's a very growing platform that the more time we spend on our phones, we'll continue to. Fastly is a different story. Clearly it's been wrecked even before the recent correction. This is a company that two years ago had a lot riding on TikTok. It's a CDN. It's basically a content delivery network, and they had a lot of the business riding on the success of TikTok, then the whole China versus U.S. thing. But even once that stopped being a factor that, we lost TikTok, at least in most markets, Fastly did not find ways to adapt.
I think that's where, and again, I haven't followed Fastly in the last few months, but I know things necessarily haven't gotten better. It is not the same story it was three years ago, two years ago, whereas Twilio has evolved and continued to impress and deliver and exceed expectations. Fastly has a lot to prove. But again, it's a very low price on Fastly right now relative to historical valuations on the company. But again, it's a company where you're, prove it, or earn this, like Saving Private Ryan. It's like I've gone through all this, earn this, let me know that you will actually live on to do this. Twilio has earned it, and I don't know if Fastly has yet.