Fastly's stock plummets because its largest customer is TikTok

Fastly, a cloud computing service provider, has risen 364% in the Nasdaq in 2020, and has even outpaced Zoom during the pandemic. Yet President Donald Trump's recent threats to outlaw TikTok — which accounted for 12% of Fastly's revenue over the last six months — could spell trouble for the company. Fastly's stock fell 17% Thursday.

"Any ban of the TikTok app by the US would create uncertainty around our ability to support this customer," Fastly CEO Joshua Bixby said on a quarterly earnings call. "While we believe we are in a position to backfill the majority of this traffic in case they are no longer able to operate in the US, the loss of this customer's traffic would have an impact on our business."

Other companies use Fastly's robust content delivery network, including Shopify, Spotify, and Slack. TikTok, however, remains Fastly's largest user.

Still, the company's second quarter earnings were impressive. Revenue grew 62% compared to the same quarter the previous year, and total customer count grew to 1,951 from 1,837 — Fastly's largest quarterly increase since its IPO in May 2019.