Fastly, Inc. (FSLY) Gains Attention as AI Adoption Supports Infrastructure Software

We recently compiled a list of the 12 Cheap Small-Cap Stocks to Invest In Before the Next Breakout. The sixth stock on our list of best small-cap stocks is Fastly, Inc.

TheFly reported on January 16 that Citi analyst Fatima Boolani lowered the price target on FSLY to $10 from $12 and maintained a Neutral rating. The adjustment was made as part of Citi’s 2026 outlook for the infrastructure software group, with the firm expecting the sector’s momentum from 2025 to carry into the new year.

Separately, on January 5, RBC Capital raised its price target on Fastly, Inc. (NASDAQ:FSLY) to $10 from $9 and maintained a Sector Perform rating. According to the firm, companies that are positioned to promote enterprise AI adoption may see additional AI-related tailwinds in 2026. Despite cautious early-2026 forecasts from management teams, RBC stated that enterprise investment appeared to be stabilizing in several sectors, with generative AI driving innovation.

Fastly, Inc. (NASDAQ:FSLY) is a U.S. cloud computing and edge-infrastructure company that provides high-performance content delivery network (CDN), edge computing, security, and web-performance services.

While we acknowledge the potential of FSLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.