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Why is this cloud stock up 25% on Monday?

fastly stock up 25% on bofa upgrade to buy

Shares of Fastly Inc (NYSE: FSLY) are up more than 25% today after a Bank of America analyst turned super bullish on the cloud computing services provider.

It’s still not too late to buy Fastly stock

On Monday, Tal Liani double upgraded the cloud stock to “buy” and raised his price objective to $16 a share – up another 30% from here.

The analyst is bullish primarily on the leadership of Todd Nightingale who the California-based company named its Chief Executive in August of 2022.

Fastly’s new CEO has taken steps to streamline product portfolio, pricing, and other operational aspects, and we believe this could drive revenue growth reacceleration with the company reaching profitability by 2024.

The near-term, though, could remain volatile, he agreed. Year-to-date, Fastly stock is now up more than 50%.

Fastly is committed to improving margins

Fastly Inc is scheduled to report its Q4 earnings later this week. Consensus is for it to lose 42 cents a share this quarter, narrower than 44 cents a year ago.

Other reasons cited for the constructive view on Fastly stock include the company’s commitment to lowering costs and thereby improving operating margins. Liani’s research note reads:

Fastly’s core technology/network is differentiated yet needs to be sharpened; the technology could serve as a solid foundation for other adjacent services; we also highlight close relationships it has with developer community.

He likes Fastly Inc for its increased focus on security and edge cloud solutions as well. Last week, the company was named a 2023 Gartner® Peer Insights™ Customers’ Choice for Cloud Web Application and API Protection (WAAP).

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