Fastly Stock Eyes Best Day Ever After Beat-and-Raise

Fastly Inc (NASDAQ:FSLY) is soaring to nearly two-year highs, last seen up 61.4% at $15.02 and trading at its highest levels since late February 2024. The cloud name posted strong full-year revenue and profit forecasts after better-than-expected earnings of 12 cents per share on record revenue of $172.6 million. In response, William Blaire upgraded the stock to "buy" from "hold," citing "rising contribution from agentic AI traffic, which we believe is still in its infancy."

Should these gains hold, FSLY will mark its best single-day percentage gain on record, the previous being a 45.7% pop in May 2020. The shares are also breaking into positive territory on a year-to-date and year-over-year basis. Before today's bull gap, FSLY was already rebounding off of support at the $8 level. 

Fastly is the most popular stock in the options pits today. So far, the AI play has seen 44,000 calls and 18,000 puts exchanged -- 43 times the amount typically seen at this point and 12.4 times its average daily options volume. Expiring tomorrow, the weekly 2/13 15-strike call is the most popular, followed by the February 14 put. New positions are being opened at both. 

Some of today's surge could be contributed to short covering, as short interest represented 10% of the stock's available float coming into today. It would take shorts over three days to buy back their bearish bets, at FSLY's average pace of trading. 

More bull notes could be on the way, as seven of the 10 analysts in coverage still carry a "hold" or worse rating on FSLY. Plus, the 12-month consensus price target of $11.86 is now a roughly 21% discount to current levels.