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Cloudflare vs. Fastly: Which CDN Player is a Safe Investment Bet?
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Key Takeaways
Cloudflare appears the safer CDN bet, backed by broader products and AI-driven growth engines.
NET serves roughly 80% of leading AI firms, with security driving long-term commitments.
Fastly is growing security revenues and AI features, but faces a 2026 convertible notes maturity.
Cloudflare (NET - Free Report) and Fastly (FSLY - Free Report) are both leading the content delivery network (CDN) space. While Cloudflare focuses on a global expansion strategy, Fastly focuses on a high-performance, programmable content delivery network.
Both Cloudflare and Fastly are investing in AI as part of their contemporary strategy. The question remains, which stock remains in the superior position in the CDN market today? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.
The Case for Cloudflare Stock
Cloudflare’s CDN provides a globally distributed, high-performance platform that speeds up content delivery, all the while keeping secure web connectivity. Cloudflare uses methods like tiered caching, Argo smart routing, and cache reserve to minimize traffic and optimize delivery efficiency. Cloudflare’s CDN supports advanced protocols, including HTTP/3, and offers developer flexibility through Cloudflare Workers.
Cloudflare’s deployment of edge network and security at scale has enabled it to provide a low-latency network at an affordable cost, giving it a competitive advantage among AI companies that now deploy AI agents across Cloudflare’s globally distributed edge network. In this pursuit, Cloudflare now serves roughly 80% of leading AI companies globally. This has further led to enterprise adoption of NET’s offerings, leading to long-term commitments. Cloudflare now commands more than 55 revenue-generating products.
NET’s security offerings have strengthened its position in the content delivery network space. Cloudflare’s Magic Transit, Zero Trust, and modern SASE solutions are experiencing increased traction. The rise of AI scraping and bot activity is also helping NET monetize its products like AI Crawl Control, Bot Management, and future Pay-Per-Crawl models. Together, these tailwinds in AI, security, multi-cloud networking, developer platforms, and enterprise scale create a multi-layered growth engine for Cloudflare.
Moreover, Cloudflare’s AI inference strategy being different from hyperscalers has enabled it to maximize system efficiency and utilization per capital expenditure dollar spent on developing the infrastructure, hence optimizing the cost structure of AI inference. While hyperscalers are dealing with the GPU utilization paradox, Cloudflare is maximizing GPU utilization and minimizing overhead cost. Together, these synergies are driving the bottom line up. The Zacks Consensus Estimate for Cloudflare’s 2025 earnings implies year-over-year growth of 21.3%. The estimate for 2025 has been revised upward in the past 60 days.
Image Source: Zacks Investment Research
The Case for Fastly Stock
Fastly focuses on high-performance, programmable content delivery networks. Its Managed CDN gives its customers full control and flexibility by setting up dedicated servers inside their own private networks. It can be used alone or alongside multiple other CDNs in a hybrid setup. Fastly provides its CDN platform as part of a comprehensive solution, which includes DDoS protection capabilities for protection from Layer 3 and 4 DDoS attacks, bot management, advanced rate limiting and Next Gen WAF.
Fastly’s other solutions, like Media Shield, enable large streaming companies using multiple CDNs to reduce duplicate content requests, making streaming faster, more efficient, and less demanding on infrastructure. Fastly provides faster time to first byte compared to traditional cloud CDNs due to its high-capacity POPs and ultra-fast global purge times. The Fastly CDN reduces costs through features like Origin Shield and allows configurability through APIs, real-time log streaming, and seamless integration with CI/CD toolchains.
Although the CDN market is highly competitive due to its fragmented nature and presence of multiple large players, Fastly has carved its niche and is pursuing growth in that direction. Fastly is now implementing AI in API discovery, WAF and MCP server, and is already gaining from these upgrades. Fastly’s platform expansion and cross selling strategies has contributed to its security revenue growth to 30% year over year.
However, Fastly faces a near-term challenge. Fastly's $188.6 million of 0% convertible senior notes is still outstanding and is scheduled to come on March 15, 2026. Given the high interest rates, refinancing the $188.6 million maturity becomes more expensive for Fastly. Despite these factors, the Zacks Consensus Estimate for Fastly’s 2025 bottom line has been revised upward in the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of FSLY and NET
In the past three months, Fastly shares have surged 21.6%, while shares of Cloudflare have lost 7.3%.
Image Source: Zacks Investment Research
Cloudflare is trading at a forward sales multiple of 26.23X, while FSLY is trading at a forward sales multiple of 2.34X.
Image Source: Zacks Investment Research
Conclusion: NET vs. FSLY
Both companies are major players in the CDN space, but NET seems to be a safer investment bet today, given its larger scale, broader product portfolio, stronger enterprise traction, and clearer AI monetization pathway that is already translating into earnings growth and upward estimate revisions.
Image: Bigstock
Cloudflare vs. Fastly: Which CDN Player is a Safe Investment Bet?
Key Takeaways
Cloudflare (NET - Free Report) and Fastly (FSLY - Free Report) are both leading the content delivery network (CDN) space. While Cloudflare focuses on a global expansion strategy, Fastly focuses on a high-performance, programmable content delivery network.
Both Cloudflare and Fastly are investing in AI as part of their contemporary strategy. The question remains, which stock remains in the superior position in the CDN market today? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.
The Case for Cloudflare Stock
Cloudflare’s CDN provides a globally distributed, high-performance platform that speeds up content delivery, all the while keeping secure web connectivity. Cloudflare uses methods like tiered caching, Argo smart routing, and cache reserve to minimize traffic and optimize delivery efficiency. Cloudflare’s CDN supports advanced protocols, including HTTP/3, and offers developer flexibility through Cloudflare Workers.
Cloudflare’s deployment of edge network and security at scale has enabled it to provide a low-latency network at an affordable cost, giving it a competitive advantage among AI companies that now deploy AI agents across Cloudflare’s globally distributed edge network. In this pursuit, Cloudflare now serves roughly 80% of leading AI companies globally. This has further led to enterprise adoption of NET’s offerings, leading to long-term commitments. Cloudflare now commands more than 55 revenue-generating products.
NET’s security offerings have strengthened its position in the content delivery network space. Cloudflare’s Magic Transit, Zero Trust, and modern SASE solutions are experiencing increased traction. The rise of AI scraping and bot activity is also helping NET monetize its products like AI Crawl Control, Bot Management, and future Pay-Per-Crawl models. Together, these tailwinds in AI, security, multi-cloud networking, developer platforms, and enterprise scale create a multi-layered growth engine for Cloudflare.
Moreover, Cloudflare’s AI inference strategy being different from hyperscalers has enabled it to maximize system efficiency and utilization per capital expenditure dollar spent on developing the infrastructure, hence optimizing the cost structure of AI inference. While hyperscalers are dealing with the GPU utilization paradox, Cloudflare is maximizing GPU utilization and minimizing overhead cost. Together, these synergies are driving the bottom line up. The Zacks Consensus Estimate for Cloudflare’s 2025 earnings implies year-over-year growth of 21.3%. The estimate for 2025 has been revised upward in the past 60 days.
Image Source: Zacks Investment Research
The Case for Fastly Stock
Fastly focuses on high-performance, programmable content delivery networks. Its Managed CDN gives its customers full control and flexibility by setting up dedicated servers inside their own private networks. It can be used alone or alongside multiple other CDNs in a hybrid setup. Fastly provides its CDN platform as part of a comprehensive solution, which includes DDoS protection capabilities for protection from Layer 3 and 4 DDoS attacks, bot management, advanced rate limiting and Next Gen WAF.
Fastly’s other solutions, like Media Shield, enable large streaming companies using multiple CDNs to reduce duplicate content requests, making streaming faster, more efficient, and less demanding on infrastructure. Fastly provides faster time to first byte compared to traditional cloud CDNs due to its high-capacity POPs and ultra-fast global purge times. The Fastly CDN reduces costs through features like Origin Shield and allows configurability through APIs, real-time log streaming, and seamless integration with CI/CD toolchains.
Although the CDN market is highly competitive due to its fragmented nature and presence of multiple large players, Fastly has carved its niche and is pursuing growth in that direction. Fastly is now implementing AI in API discovery, WAF and MCP server, and is already gaining from these upgrades. Fastly’s platform expansion and cross selling strategies has contributed to its security revenue growth to 30% year over year.
However, Fastly faces a near-term challenge. Fastly's $188.6 million of 0% convertible senior notes is still outstanding and is scheduled to come on March 15, 2026. Given the high interest rates, refinancing the $188.6 million maturity becomes more expensive for Fastly. Despite these factors, the Zacks Consensus Estimate for Fastly’s 2025 bottom line has been revised upward in the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of FSLY and NET
In the past three months, Fastly shares have surged 21.6%, while shares of Cloudflare have lost 7.3%.
Image Source: Zacks Investment Research
Cloudflare is trading at a forward sales multiple of 26.23X, while FSLY is trading at a forward sales multiple of 2.34X.
Image Source: Zacks Investment Research
Conclusion: NET vs. FSLY
Both companies are major players in the CDN space, but NET seems to be a safer investment bet today, given its larger scale, broader product portfolio, stronger enterprise traction, and clearer AI monetization pathway that is already translating into earnings growth and upward estimate revisions.
Currently, Fastly carries a Zacks Rank #3 (Hold), while NET has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.