F5 and Cloudflare lead CDN earnings as market pivots toward AI

The traditional CDN model is transitioning into a secondary feature within broader security and edge compute platforms. F5’s success highlights a shift toward high-performance application delivery in hybrid environments, while Cloudflare’s growth confirms that low-latency security is now the primary driver of infrastructure spending. For streaming strategists, this indicates that network performance is increasingly bundled with cybersecurity rather than sold as a standalone commodity. Watch for whether Fastly’s guidance raise translates into actual margin expansion as AI traffic patterns stabilize across global networks.

The transition from legacy delivery to high-margin services is accelerating across the infrastructure landscape. Per Akamai’s May 2026 reporting, security products now contribute the majority of its annual revenue, a historic milestone that highlights the commoditization of basic content delivery. This shift is further evidenced by Akamai’s recent $1.8 billion, seven-year cloud infrastructure deal with a major AI model provider, signaling that the next wave of CDN growth is inextricably linked to AI inference and large-scale data processing.

Cloudflare is simultaneously undergoing a structural pivot to address what it terms the 'Agentic Internet.' Per Cloudflare’s May 2026 earnings call, the company is reducing its workforce by 20%—affecting roughly 1,100 employees—to reorganize around AI-first operations. CEO Matthew Prince specified that the reduction focuses on 'measurer' roles to prioritize specialized 'builders' and 'sellers.' This reorganization coincides with a decline in gross margins to 71.2%, which the company attributes to the rapid scaling of its Workers developer platform and shifting network costs.

Fastly is also reporting material impacts from AI, specifically regarding how autonomous agents consume web content. Per Fastly’s February 2026 data, AI crawlers and fetchers now account for nearly 29% of web traffic, with Meta and OpenAI driving the highest concentrations of requests. This surge in bot-driven volume is validating consumption-based edge economics, as fetcher bots often retrieve content across multiple sites simultaneously, increasing network usage per user interaction compared to traditional human browsing. Despite this volume, the sector faces new competitive pressure from model providers like Anthropic, which recently launched managed agent services that some investors view as a direct alternative to edge compute platforms.