10 Worst AI Stocks to Buy According to Reddit

8. Fastly Inc. (NYSE:FSLY)

Short % of Shares Outstanding As of August 30: 10.31%

Number of Hedge Fund Holders: 23

Fastly Inc. (NYSE:FSLY) is a cloud computing services provider that describes its network as an edge cloud platform, designed to help developers extend their core cloud infrastructure to the edge of the network, closer to users.

In June, it launched Fastly AI Accelerator, its first AI solution designed to create a better experience for developers by improving performance and reducing costs across the use of similar prompts for LLM apps. Earlier, it released a Bot Origin Protection (BOP) mitigation solution which was well-received by customers, strengthening its security portfolio and opening up opportunities for cross-selling.

Analysts are concerned that its stock may decline due to slowing growth from its largest customers and potential market share loss in the delivery market. Fastly Inc. (NYSE:FSLY) has been facing pricing pressure in its delivery business. The expected weakness, mainly among the top 15 customers, is due to lower renewal rates without corresponding traffic increases. The absence of minimum commitments in contracts with these customers raises the risk of traffic being diverted to cheaper providers.

Despite these risks, the company made $132.37 million in Q2 revenue for this year, up 7.77% year-over-year. Top 10 customers made up 34% of the total revenues. Enterprise customer count increased by 4% sequentially and 50% year-over-year. Its channel partners, the intermediaries between the company and its end-users, grew deal registrations by 33%, and the channel’s revenue contribution more than doubled year-to-date.

The company is prioritizing customer acquisition, portfolio expansion, and innovative edge technologies. This is essential to achieve the aim of $1 billion in revenue in the next few years. Its modern CDN technology offers a competitive advantage over legacy competitors and is preferred by developers. Fastly Inc. (NYSE:FSLY) is actively restructuring to reduce costs and aims to achieve profitability by 2025.