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Fastly's Compute Revenues Surge: Is AI Demand Powering Growth?
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Key Takeaways
FSLY's Other revenues rose 67% year over year to $8 million in first-quarter 2026.
FSLY posted a record $1.6 million jump from the prior quarter for Other revenues.
FSLY linked Compute growth to AI demand, including edge inference and agentic AI tests.
Fastly, Inc. (FSLY - Free Report) is seeing growing traction in its Compute business as enterprises increasingly explore AI-driven workloads at the edge. In first-quarter 2026, Fastly’s Other revenues, which include Compute and Observability solutions, soared 67% year over year to $8 million. The company also reported a record $1.6 million sequential increase in the category, representing its largest quarter-over-quarter revenue step-up to date.
The acceleration appears closely tied to rising AI-related demand. Fastly said that increased customer requirements in AI and related areas contributed to Compute momentum during the quarter. The company also noted growing customer interest in features designed to improve interoperability with large language models, enabling workloads to be processed closer to end users through edge infrastructure.
Fastly indicated that customers are increasingly evaluating agentic AI and edge inference use cases, with the company working alongside enterprises on deployment and optimization efforts. It also highlighted that traffic associated with AI agents and automated workloads is becoming a larger share of internet activity over time.
Even with the strong growth, the company characterized many of these AI opportunities as still being in the early stages. Fastly described its current approach as co-innovation with customers on large and complex opportunities tied to AI and edge computing.
The quarter nevertheless showed that Compute is becoming a more meaningful contributor within Fastly’s platform strategy. The sharp growth rate and record sequential increase suggest that AI-related workloads are beginning to create measurable demand for the company’s edge compute offerings.
AKAM & NET Ride on Rising AI Infrastructure Demand
Akamai Technologies, Inc. (AKAM - Free Report) is also benefiting from the AI-driven surge in edge and cloud infrastructure demand. In first-quarter 2026, AKAM’s Cloud Infrastructure Services revenues jumped 40% year over year to $95 million, supported by growing AI inference and distributed compute workloads. Akamai Technologies also announced a landmark seven-year $1.8 billion cloud infrastructure agreement with a leading frontier AI model company, while management highlighted a rapidly expanding AI-specific pipeline.
Cloudflare, Inc. (NET - Free Report) is witnessing similar momentum from accelerating AI adoption trends. NET reported first-quarter 2026 revenue growth of 34% year over year to $639.8 million, with management describing AI as the company’s “biggest tailwind” ever. Cloudflare noted strong growth in AI and agentic workloads, including hundreds of billions of agentic requests running through its network every month.
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Fastly's Compute Revenues Surge: Is AI Demand Powering Growth?
Key Takeaways
Fastly, Inc. (FSLY - Free Report) is seeing growing traction in its Compute business as enterprises increasingly explore AI-driven workloads at the edge. In first-quarter 2026, Fastly’s Other revenues, which include Compute and Observability solutions, soared 67% year over year to $8 million. The company also reported a record $1.6 million sequential increase in the category, representing its largest quarter-over-quarter revenue step-up to date.
The acceleration appears closely tied to rising AI-related demand. Fastly said that increased customer requirements in AI and related areas contributed to Compute momentum during the quarter. The company also noted growing customer interest in features designed to improve interoperability with large language models, enabling workloads to be processed closer to end users through edge infrastructure.
Fastly indicated that customers are increasingly evaluating agentic AI and edge inference use cases, with the company working alongside enterprises on deployment and optimization efforts. It also highlighted that traffic associated with AI agents and automated workloads is becoming a larger share of internet activity over time.
Even with the strong growth, the company characterized many of these AI opportunities as still being in the early stages. Fastly described its current approach as co-innovation with customers on large and complex opportunities tied to AI and edge computing.
The quarter nevertheless showed that Compute is becoming a more meaningful contributor within Fastly’s platform strategy. The sharp growth rate and record sequential increase suggest that AI-related workloads are beginning to create measurable demand for the company’s edge compute offerings.
AKAM & NET Ride on Rising AI Infrastructure Demand
Akamai Technologies, Inc. (AKAM - Free Report) is also benefiting from the AI-driven surge in edge and cloud infrastructure demand. In first-quarter 2026, AKAM’s Cloud Infrastructure Services revenues jumped 40% year over year to $95 million, supported by growing AI inference and distributed compute workloads. Akamai Technologies also announced a landmark seven-year $1.8 billion cloud infrastructure agreement with a leading frontier AI model company, while management highlighted a rapidly expanding AI-specific pipeline.
Cloudflare, Inc. (NET - Free Report) is witnessing similar momentum from accelerating AI adoption trends. NET reported first-quarter 2026 revenue growth of 34% year over year to $639.8 million, with management describing AI as the company’s “biggest tailwind” ever. Cloudflare noted strong growth in AI and agentic workloads, including hundreds of billions of agentic requests running through its network every month.
FSLY Stock Price Performance, Valuation & Estimates
Shares of Fastly have surged 115.6% over the past year against the industry’s decline of 14.7%.
FSLY Price Performance Versus Industry
Image Source: Zacks Investment Research
From a valuation standpoint, FSLY trades at a forward price-to-sales ratio of 3.49, lower than the industry’s average of 3.73.
FSLY’s Valuation Compared to Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for FSLY’s 2026 and 2027 earnings implies year-over-year growth of 146.2% and 19.8%, respectively.
Fastly currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.