Every investor has felt the itch to buy the one stock everyone else already owns. Fastly’s chart this year has that kind of pull, a steady climb that turns skeptics into buyers with each new high. One of Wall Street’s largest banks looked at that same chart and decided to stay out.
BofA Global Research published its second-quarter preview of the cybersecurity and cloud infrastructure sector on July 31, covering Akamai (AKAM), Cloudflare (NET) and Fastly (FSLY) ahead of their upcoming earnings reports.
Analysts Tal Liani and Trevor Dodds gave Akamai and Cloudflare Buy ratings, with price objectives of $175 and $330.
Fastly received the opposite treatment. It got an Underperform rating and a $20 price target, the lowest rating BofA assigns anywhere in its coverage group.
That gap matters because Fastly has been one of the best-performing stocks in the market this year.
Shares of Fastly (FSLY) have climbed roughly 98% year to date, as investors bet the edge cloud company is finally diversifying beyond its legacy delivery business. BofA’s analysts are betting the opposite is true.
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Fastly’s rally has outrun its revenue mix
The bank’s skepticism comes down to one number. Network Services, Fastly’s original content delivery business, still made up roughly 73% of first-quarter revenue, according to BofA Global Research.
Security revenue grew quickly but represented only about 22% of the total, and Compute remained under 5%, the same note found.
That matters because Fastly’s stock price has priced in a diversification story that the revenue mix has not caught up to yet. Security products like bot management and API discovery compete in a crowded field with limited pricing power, BofA’s analysts wrote.
Until Compute and Security become large enough to offset a traffic-sensitive delivery business, the bank argues, Fastly’s growth remains tied to the market it is trying to diversify away from.
Fastly reports second-quarter results on Aug. 5, just days after BofA’s note went out. That timing raises the stakes for a stock priced for a transformation story it has not fully delivered yet.
BofA rates Fastly Underperform even as shares have nearly doubled in 2026, while backing Akamai and Cloudflare with Buy ratings.
Akamai’s AI contract earns it the benefit of the doubt
Akamai’s setup looks different. The company disclosed a $1.8 billion, seven-year cloud infrastructure contract with a “leading frontier model provider” in its first-quarter earnings, a deal Bloomberg later identified as Anthropic.
Shares jumped 27% in a single day, the largest one-day rally in the company’s history, according to CNBC.
BofA’s bullish case rests on that contract turning into durable, high-margin cloud revenue rather than a one-time win.
The bank also pointed to Akamai’s newly completed acquisition of LayerX, an Israeli browser-security startup that extends its Zero Trust platform into AI usage controls, a deal Akamai’s own announcement values at roughly $205 million.
The purchase is expected to dilute 2026 earnings modestly while opening a cross-sell opportunity across Akamai’s existing security customers.
The catch is economics, not growth. BofA expects gross margin to slip to 70.9% in the second quarter as data center buildout costs ramp ahead of the contract’s full revenue contribution, a trade-off the bank still views as worth making.
Cloudflare’s premium price tag raises the bar
Cloudflare enters its print with the strongest headline numbers of the three companies. Revenue grew 34% year over year to $639.8 million in the first quarter, and the company ended the period with more than 4,400 customers paying over $100,000 annually, according to its earnings call transcript.
BofA kept its Buy rating intact heading into the second-quarter print.
Even so, the bank’s confidence comes with a caveat. Cloudflare trades at roughly 27 times forward sales, and BofA’s analysts say the real test is not this quarter’s growth rate. It is whether the company’s pool-of-funds customer commitments convert into actual product usage in the back half of the year.
A growth rate below 30%, the bank noted, would hurt the stock more than any further pressure on margins.
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The market is pricing conviction Wall Street has not given it
What connects these three calls is not the sector. It is the gap between stock performance and analyst confidence.
Akamai and Cloudflare earned their Buy ratings with signed contracts and customer cohort data that back up the growth story investors are paying for.
Fastly’s rally, by contrast, has run well ahead of the revenue diversification BofA says still has not shown up.
Security and Compute are growing, but neither is yet large enough to change what kind of company Fastly actually is.
That divergence says something about this stage of the AI infrastructure cycle. Momentum and AI-adjacent narratives are getting rewarded faster than underlying business mix can catch up to them, and the stocks trading richest are not always the ones analysts trust the most.
Fastly’s earnings on Aug. 5 will be the first real test of which side of that gap is right.
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