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Akamai
(NASDAQ:AKAM)
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Rating:70Outperform
Price Target:
$142.00
▲(48.09% Upside)
Action:Upgraded
Date:05/23/26
Strong technical uptrend and constructive earnings-call outlook (CIS/AI-driven growth and a landmark customer deal) support the score. Offsetting factors are softened financial quality (margin compression, higher leverage, weaker cash conversion) and a relatively expensive valuation (high P/E with no dividend yield).
Positive Factors
Large multi-year committed customer (visibility)
A seven‑year $1.8B committed contract provides durable revenue visibility and underpins multi-year capacity planning. Committed cashflows reduce demand volatility, justify accelerated CIS investment, and improve utilization of new infrastructure, de‑risking long-term revenue scaling.
Negative Factors
Elevated leverage and covenant flexibility
Meaningfully higher leverage reduces financial flexibility as the company funds heavy CIS CapEx. Elevated debt ratios increase refinancing and covenant risk during investment cycles, potentially constraining strategic optionality and increasing effective funding costs if macro or credit conditions tighten.
Read all positive and negative factors
Positive Factors
Negative Factors
Large multi-year committed customer (visibility)
A seven‑year $1.8B committed contract provides durable revenue visibility and underpins multi-year capacity planning. Committed cashflows reduce demand volatility, justify accelerated CIS investment, and improve utilization of new infrastructure, de‑risking long-term revenue scaling.
Read all positive factors
Akamai Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
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The Fly
The FlyAkamai (AKAM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.83B
Dividend YieldN/A
Average Volume (3M)4.09M
Price to Earnings (P/E)42.1
Beta (1Y)0.50
Revenue Growth6.15%
EPS Growth0.30%
CountryUS
Employees10,811
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)3.01
Shares Outstanding145,385,450
10 Day Avg. Volume3,844,091
30 Day Avg. Volume4,086,476
Financial Highlights & Ratios
PEG Ratio-4.07
Price to Book (P/B)2.55
Price to Sales (P/S)3.01
P/FCF Ratio18.14
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue5.59
Enterprise Value/Gross Profit9.76
Enterprise Value/Ebitda17.99
Forecast
1Y Price Target
$162.72Price Target Upside69.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
EPS Forecast (FY)6.69
Revenue Forecast (FY)$4.50B
Akamai Business Overview & Revenue Model
Company Description
Akamai Technologies, Inc. (AKAM) is a leading global provider of cloud services, specializing in the secure delivery, optimization, and protection of online content and business applications across the internet. The company's primary focus involve...
How the Company Makes Money
Akamai makes money primarily by selling subscription- and usage-based cloud services to enterprises, digital platforms, and public-sector customers. Its revenue is largely generated from (1) security solutions, where customers pay for protections ...
Akamai Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The quarter highlights a major strategic inflection toward cloud infrastructure and AI inference backed by a landmark $1.8B customer commitment, strong CIS growth (Q1 CIS +40% YoY and FY guide of ≥50%) and continued security momentum (Q1 security +11% YoY) alongside industry recognition and solid liquidity. Offsetting these positives are near-term profitability and cash deployment pressures — higher CapEx (notably ~$700M planned for 2026 for the large deal), increased depreciation and headcount that compressed non-GAAP net income (down 5% YoY), and ongoing declines in the delivery segment. Management expects margins to remain constrained in the near term as it invests to capture what it characterizes as a sizable multi-year AI opportunity, and there is potential for incremental GPU orders beyond current guidance. Overall, the call is constructive about long-term growth and market positioning but candid about short-term investment-related headwinds.Positive Updates
Record Landmark Customer Win
Signed a seven-year $1.8 billion committed contract—the largest customer deal in company history; expected initial revenue contribution of ~$20M–$25M in Q4 2026 and full deployment revenue to ramp thereafter.
Negative Updates
Profitability Pressure from Investments
Non-GAAP net income of $239 million (non-GAAP EPS $1.61) was down 5% year-over-year; results impacted by expanded colocation investments, higher depreciation, and increased headcount tied to CIS investment.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Landmark Customer Win
Signed a seven-year $1.8 billion committed contract—the largest customer deal in company history; expected initial revenue contribution of ~$20M–$25M in Q4 2026 and full deployment revenue to ramp thereafter.
Read all positive updates
Company Guidance
Akamai’s guidance called for Q2 revenue of $1.075–$1.100 billion (up 3%–5% y/y), cash gross margins of ~70%–71%, non‑GAAP operating expenses of $346–$357 million, EBITDA margin of ~38%–39%, non‑GAAP depreciation of $140–$144 million, non‑GAAP operating margin of ~25%–26%, non‑GAAP EPS of $1.45–$1.65 (assuming $47–$54 million of taxes at an ~18.5% non‑GAAP tax rate and ~146 million diluted shares), and Q2 CapEx of $433–$453 million (~40%–41% of revenue); for full‑year 2026 they guided revenue of $4.445–$4.55 billion (up 6%–8% reported, 5%–8% constant currency), at least 50% constant‑currency growth for Cloud Infrastructure Services (CIS), security growth in the high single digits, delivery down mid single digits, a ~26% non‑GAAP operating margin, CapEx of ~40%–42% of revenue (including roughly $700 million of the ~$800–$825 million 12‑month spend to support the $1.8 billion customer), non‑GAAP EPS of $6.40–$7.15 (based on ~18.5% tax and ~147 million shares), FX headwind/benefit assumptions (Q2 ~flat vs Q1, +$2M y/y; FY +$20M), and an expected initial revenue contribution from the $1.8B customer of roughly $20–$25 million in Q4.Akamai Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
56
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.27B | 4.21B | 3.99B | 3.81B | 3.62B | 3.46B |
| Gross Profit | 2.44B | 2.30B | 2.37B | 2.30B | 2.23B | 2.19B |
| EBITDA | 1.33B | 1.34B | 1.26B | 1.24B | 1.26B | 1.35B |
| Net Income | 435.18M | 452.03M | 504.92M | 547.63M | 523.67M | 651.64M |
Balance Sheet | ||||||
| Total Assets | 11.65B | 11.48B | 10.37B | 9.90B | 8.30B | 8.14B |
| Cash, Cash Equivalents and Short-Term Investments | 930.45M | 1.19B | 1.60B | 864.44M | 1.11B | 1.08B |
| Total Debt | 5.87B | 6.91B | 4.63B | 4.54B | 3.17B | 2.86B |
| Total Liabilities | 6.74B | 6.50B | 5.49B | 5.30B | 3.94B | 3.61B |
| Stockholders Equity | 4.91B | 4.98B | 4.88B | 4.60B | 4.36B | 4.53B |
Cash Flow | ||||||
| Free Cash Flow | 764.73M | 699.26M | 833.90M | 618.40M | 816.37M | 859.33M |
| Operating Cash Flow | 1.58B | 1.52B | 1.52B | 1.35B | 1.27B | 1.40B |
| Investing Cash Flow | -1.74B | -540.74M | -798.68M | -1.85B | -622.31M | -646.90M |
| Financing Cash Flow | -327.50M | -588.04M | -679.63M | 443.38M | -634.18M | -562.00M |
Akamai Technical Analysis
Positive
95.89
Price Trends
132.66
Negative
118.49
Positive
101.94
Positive
Market Momentum
-3.33
Negative
51.11
Neutral
89.46
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AKAM, the sentiment is Positive. The current price of 95.89 is below the 20-day moving average (MA) of 121.94, below the 50-day MA of 132.66, and below the 200-day MA of 101.94, indicating a neutral trend. The MACD of -3.33 indicates Negative momentum. The RSI at 51.11 is Neutral, neither overbought nor oversold. The STOCH value of 89.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AKAM.
Akamai Risk Analysis
Akamai disclosed 32 risk factors in its most recent earnings report. Akamai reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Akamai Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $119.96B | 60.61 | 155.65% | ― | 15.75% | 6.24% | |
75 Outperform | $202.02B | -3,943.68 | -0.58% | ― | 23.17% | 73.57% | |
70 Outperform | $18.83B | 42.12 | 9.12% | ― | 6.15% | 0.30% | |
68 Neutral | $23.79B | -291.18 | -3.71% | ― | 24.61% | -91.58% | |
67 Neutral | $97.94B | -1,077.93 | -6.23% | ― | 31.55% | -4.50% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $8.42B | -51.11 | -2.30% | ― | 23.96% | 78.71% |
* Technology Sector Average
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Akamai Corporate Events
Stock BuybackPrivate Placements and Financing
Akamai Completes Major Convertible Notes Offering and Buyback
Positive
May 22, 2026
On May 22, 2026, Akamai Technologies completed a private placement of two tranches of 0.00% Convertible Senior Notes, issuing $1.75 billion of notes due 2030 and $1.75 billion of notes due 2032 to qualified institutional buyers under Rule 144A. Th...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
Akamai Prices $3 Billion Zero-Coupon Convertible Notes Offering
Positive
May 20, 2026
On May 19, 2026, Akamai priced an upsized private offering of $3 billion in 0% convertible senior notes, split evenly between tranches maturing in 2030 and 2032, sold to qualified institutional buyers. The senior unsecured notes carry significant ...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
Akamai Boosts Flexibility with Convertible Notes and Credit Amendments
Positive
May 18, 2026
On May 18, 2026, Akamai Technologies amended its existing credit agreement with a syndicate of lenders led by JPMorgan Chase, temporarily loosening its maximum consolidated leverage ratio to 4.75:1.00 for the fiscal quarters ending June 30 and Sep...
Business Operations and StrategyShareholder Meetings
Akamai Shareholders Approve Equity Plans and Governance Changes
Positive
May 13, 2026
At its May 13, 2026 annual meeting, Akamai stockholders approved a new 2026 Employee Stock Purchase Plan and an amendment to the 2013 Stock Incentive Plan that adds 8 million shares, reinforcing the company’s ability to attract and retain ta...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.