Cloudflare shifts to agentic AI-first model to capture demand without hyperscaler spending

Fastly has secured a content and application delivery partnership with Comcast that will embed Fastly's edge software into more than 200 AI powered data processing centers across Comcast's nationwide network. The deal adds to a sharp run in Fastly's shares, which have posted a 90 day share price return of 33.3%, a year to date share price return of 134.15%, a 1 year total shareholder return of 176.48% and a 3 year total shareholder return of 28.97%. Fastly's most followed valuation narrative pegs fair value at $27.00, above the last close of $23.86, framing the Comcast AI deal against expectations for higher margin security and compute workloads. On a price to sales basis the stock trades at 5.5x sales, above the 4x fair ratio cited by the model but well below peers at 11.9x and the broader US IT sector at 1.8x. Risks to the upside case include Fastly's reliance on a concentrated group of large customers and pressure from hyperscalers bundling competing edge and security services.

Cloudflare said more than 50% of the traffic flowing across its network was nonhuman in the second quarter of 2026, reflecting rapid growth in AI agents and machine-to-machine traffic. The company ended the quarter with more than 7.4 million developers on its Workers platform, adding nearly two million in the quarter alone, and management said Workers remains one of the fastest-growing parts of its business. Cloudflare also introduced Monetization Gateway, Wallets and cloudflare.pay during the quarter to support transactions between AI agents, businesses and content providers. Second-quarter revenues increased 36% year over year, while dollar-based net retention reached 120%, and management said its total addressable market has expanded to more than $300 billion from $30 billion at the time of its IPO. The Zacks Consensus Estimate points to Cloudflare revenue growth of 32.5% in 2026 and 28.6% in 2027, with 2026 earnings estimated at $1.26 per share, up 35.5% from the prior year.