Fastly, Inc. (FSLY Quick QuoteFSLY - Free Report) and Cloudflare, Inc. (NET Quick QuoteNET - Free Report) are important players in edge cloud infrastructure, content delivery, application security and developer platforms. Both companies help enterprises deliver faster, safer and more reliable digital experiences by moving networking, security and compute functions closer to users. 

The comparison is timely because both companies recently reported strong first-quarter 2026 results and highlighted AI as a growth catalyst. Fastly, with a market capitalization of nearly $2.6 billion, delivered 20% revenue growth, supported by strong momentum in security and compute, and is working to improve profitability while expanding its platform. 

Cloudflare, with a market cap of about $74 billion, is much larger and growing faster, with 34% revenue growth and strong adoption across its connectivity cloud, security and Workers developer platform. The key question is whether Fastly’s performance-focused edge platform and expanding security portfolio can narrow the gap or whether Cloudflare’s scale, broader product suite and AI-driven momentum will keep it ahead.

The Case for Fastly

Fastly is strengthening its position as a differentiated edge cloud and security platform provider, supported by improving execution, accelerating security adoption and rising AI-driven demand. The company delivered record first-quarter 2026 revenues of $173 million, up 20% year over year, while security revenues surged 47%, significantly outpacing overall growth. 

Management highlighted increasing momentum in newer offerings such as bot management, API security and AI-focused products, indicating that Fastly is evolving beyond its legacy content delivery business into a broader platform player. The company’s expanding role in securing and optimizing AI traffic, APIs and edge workloads could become a meaningful long-term growth driver.

Fastly is also showing stronger profitability and execution. Record non-GAAP gross margin of 65.1%, positive operating income and improved cash generation reflect better traffic engineering, disciplined spending and a more efficient infrastructure model. Remaining performance obligations (RPO) rose 63% to $369 million, while net retention improved to 113%, indicating stronger customer expansion and better revenue visibility. The raised full-year guidance further underscores management’s confidence in sustained demand.

Fastly’s programmable edge architecture, strong developer focus and reputation for performance continue to help it win large enterprise customers across media, technology, payments and AI-driven applications. At the same time, risks remain. The company operates in a highly competitive market against larger rivals, and its network services business still faces pricing pressure. 

However, accelerating security adoption, improving execution and growing AI relevance are helping Fastly reposition itself as a stronger and more diversified infrastructure platform.

The Case for Cloudflare

Cloudflare continues to strengthen its position as one of the leading connectivity cloud and Internet infrastructure platforms, benefiting from rising demand for cybersecurity, application performance and AI-driven workloads. The company delivered strong first-quarter 2026 results, with revenues rising 34% year over year to $639.8 million, supported by broad-based enterprise adoption and growing traction across its Workers developer platform, Zero Trust security offerings and AI-related services.

Management highlighted that agentic AI and automated Internet traffic are becoming major growth drivers, with Cloudflare increasingly serving as critical infrastructure for AI applications, APIs and developer workloads. The company is seeing rising demand from enterprises looking to optimize, secure and route AI-driven traffic at scale, positioning it well within the evolving Internet ecosystem.

Cloudflare’s scale advantages and integrated platform strategy remain key differentiators. The company now serves more than 4,400 large customers and continues to win larger multi-product enterprise deals across technology, financial services, government and AI-native companies. Its globally distributed network, broad product portfolio and unified architecture allow customers to consolidate vendors while improving performance and security.

The company is also benefiting from growing developer adoption, with more than 5.5 million developers now on its platform, reinforcing long-term ecosystem growth. Operational execution remains solid as well, with strong free cash flow generation, double-digit operating margins and 36% growth in remaining performance obligations, supporting healthy revenue visibility.

At the same time, some near-term pressures remain. Gross margins have moderated due to rapid growth in lower-margin developer and AI-related services, while the company’s AI-first restructuring plan introduces execution risk. Nevertheless, Cloudflare’s strong enterprise momentum, expanding AI opportunity and scalable network platform continue to position it favorably within the global Internet infrastructure market.

Earnings Estimate Trends Favor Both FSLY & NET

For Fastly, the Zacks Consensus Estimate for the current and next fiscal-year earnings per share (EPS) has risen by 23.1% to 32 cents and 5.4% to 39 cents, respectively, over the past 30 days. The estimates imply year-over-year growth of 146.2% and 19.8%, respectively. 
 

Image Source: Zacks Investment Research

Over the past 30 days, the Zacks Consensus Estimate for Cloudflare’s current fiscal year EPS has increased 4.4% to $1.18, while the consensus mark for the next fiscal year has jumped 6.3% to $1.52. These estimates indicate year-over-year growth rates of 26.9% and 28.4%, respectively. Rising earnings estimates reflect improving confidence in both companies’ growth and profitability outlooks, supported by strong demand for AI, security and edge computing solutions.

Image Source: Zacks Investment Research

FSLY & NET: How Have the Stocks Performed?

Over the past year, Fastly shares have surged 128.5%, significantly outperforming the industry’s decline of 11.3%. In comparison, Cloudflare’s stock has gained 27.4%. Fastly has significantly outperformed both Cloudflare and the broader industry over the past year, reflecting growing investor confidence in its turnaround, improving profitability, and expanding AI and security opportunities.

Image Source: Zacks Investment Research

FSLY vs. NET: Valuation Reflects Different Growth Profiles

Fastly trades at a forward price-to-sales ratio of 3.49, above its one-year median of 2.07, suggesting the stock valuation has improved following its sharp rally. However, it still remains below the industry average of 3.8, indicating a relatively more reasonable valuation.
 

Image Source: Zacks Investment Research

Cloudflare trades at a much richer forward P/S of 23.62, well above the industry average, reflecting its stronger growth profile, broader scale and premium market positioning. However, the multiple is below its one-year median of 26.39, suggesting some valuation moderation.

Image Source: Zacks Investment Research

FSLY vs. NET: Which Stock Has the Edge?

Both Fastly and Cloudflare are benefiting from powerful long-term trends around AI, cybersecurity and edge computing, but they offer different risk-reward profiles. Fastly looks attractive for those seeking a turnaround story with improving profitability, rising security momentum and a relatively reasonable valuation, while Cloudflare stands out for its greater scale, broader platform capabilities and leadership in AI-driven Internet infrastructure. Overall, Cloudflare appears to be the better bet now, given its stronger long-term competitive position, diversified offerings and deeper enterprise traction.

Both Fastly and Cloudflare currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.