What Happened?
Shares of edge cloud platform Fastly (NYSE: FSLY) jumped 5.1% in the afternoon session after a major outage at competitor Amazon Web Services (AWS) boosted investor sentiment for alternative cloud providers on a day when technology stocks saw a broad rally.
The widespread disruption originated from AWS's key US-East-1 region, affecting numerous global platforms and internet services. This event underscored the operational risks for companies that depend heavily on a single cloud provider. While AWS worked to restore its services, the incident may have prompted investors to consider competitors like Fastly for their infrastructure needs. The positive move for the stock also happened as the broader tech sector experienced a strong performance, with the Nasdaq Composite gaining over 1%.
The shares closed the day at $8.29, up 5.5% from previous close.
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What Is The Market Telling Us
Fastly’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock gained 3.3% on the news that confidence in the artificial intelligence market was renewed, pushing both the S&P 500 and Nasdaq to new all-time intraday highs. The rebound was led by chipmaker Nvidia, whose shares rose nearly 2% after its CEO confirmed that demand for computing has "gone up substantially" in recent months. These comments helped reassure the market that the AI boom is supported by genuine demand, calming fears that were sparked a day earlier by a report questioning the profitability of Oracle's cloud business. The rally was strong enough to put the information technology sector on pace for a fresh closing high. This upward momentum occurred despite potential headwinds from an ongoing U.S. government shutdown, which entered its second week.
Fastly is down 10.1% since the beginning of the year, and at $8.28 per share, it is trading 27% below its 52-week high of $11.34 from December 2024. Investors who bought $1,000 worth of Fastly’s shares 5 years ago would now be looking at an investment worth $99.26.
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