Akamai (AKAM) AI Stock Analysis

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Akamai

(NASDAQ:AKAM)

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Outperform 73 (OpenAI - 5.2)

Rating:73Outperform

Price Target:

$108.00

▲(17.49% Upside)

Akamai's overall stock score reflects strong earnings performance and strategic initiatives in cloud and security, which are driving growth. However, valuation concerns and technical indicators suggest caution. The company's increasing leverage and challenges in the delivery segment are risks to monitor.

Positive Factors

Security revenue growth

Sustained high-growth security sales reflect a shift to recurring, higher-margin offerings and increasing enterprise security spend. This supports durable ARR expansion, stickier customer relationships, and predictable cash flows over the next several quarters as security becomes core to customer stacks.

Cloud infrastructure acceleration

Rapid CIS growth indicates successful transition into distributed cloud and edge compute, a structural market tailwind. Strong percentage growth off a smaller base combined with partnerships (e.g., NVIDIA) positions Akamai to capture long-term demand for low-latency AI and compute-at-edge services.

Free cash flow generation

Consistent FCF growth and an operating cash flow to net income ratio of 1.57 show durable cash conversion. That supports reinvestment in R&D and infrastructure, funds strategic M&A or partnerships, and provides buffer to service debt while pursuing cloud/security expansion.

Negative Factors

Rising leverage

Elevated and rising debt-to-equity increases financial risk and reduces strategic flexibility. If growth slows or interest costs rise, debt servicing could constrain capital allocation for R&D, edge rollout, or M&A, making leverage a durable governance and balance-sheet risk to monitor.

Decline in delivery revenue

A sustained decline in the legacy delivery/CDN segment threatens a core revenue base that historically funded transformation. Structural erosion without full offset from cloud/security could compress margins and slow overall revenue growth as the business shifts to new higher-investment offerings.

Margin pressure on EBIT/EBITDA

Declining EBIT/EBITDA margins signal cost pressures or mix shifts toward lower-margin or earlier-stage offerings. Persistent margin compression would limit reinvestment capacity and free cash flow upside, making profitability sustainability a structural concern during the strategic pivot.

Akamai (AKAM) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$13.22B

Dividend YieldN/A

Average Volume (3M)2.68M

Price to Earnings (P/E)27.0

Beta (1Y)0.62

Revenue Growth4.21%

EPS Growth-0.63%

CountryUS

Employees10,811

SectorTechnology

Sector Strength88

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)1.86

Shares Outstanding143,865,230

10 Day Avg. Volume3,934,867

30 Day Avg. Volume2,680,790

Financial Highlights & Ratios

PEG Ratio-4.12

Price to Book (P/B)2.97

Price to Sales (P/S)3.63

P/FCF Ratio17.36

Enterprise Value/Market Cap1.32

Enterprise Value/Revenue4.23

Enterprise Value/Gross Profit7.15

Enterprise Value/Ebitda12.35

Forecast

1Y Price Target

$101.86

Price Target Upside10.81% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering17

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Akamai Business Overview & Revenue Model

Company DescriptionAkamai Technologies, Inc. provides cloud services for securing, delivering, and optimizing content and business applications over the internet in the United States and internationally. The company offers cloud solutions to keep infrastructure, websites, applications, application programming interfaces, and users safe from various cyberattacks and online threats while enhancing performance. It also provides web and mobile performance solutions to enable dynamic websites and applications; media delivery solutions, including video streaming and video player services, game and software delivery, broadcast operations, authoritative domain name system, resolution, and data and analytics; and edge compute solutions to enable developers to deploy and distribute code at the edge. In addition, the company offers carrier offerings, including cybersecurity protection, parental controls, DNS infrastructure and content delivery solutions; and an array of service and support to assist customers with integrating, configuring, optimizing, and managing its offerings. It sells its solutions through direct sales and service organizations, as well as through various channel partners. Akamai Technologies, Inc. was incorporated in 1998 and is headquartered in Cambridge, Massachusetts.

How the Company Makes MoneyAkamai generates revenue primarily through a subscription-based model and usage-based fees for its CDN and cloud security services. The company's key revenue streams include sales from its web performance solutions, security solutions, and media delivery services. Akamai's partnerships with major cloud providers and enterprises enhance its offerings and expand its market reach, while its extensive network of servers strategically positioned around the globe allows for optimized content delivery and increased customer satisfaction. Additionally, the company's focus on innovation and investment in new technologies, such as edge computing and enhanced security measures, contribute to its revenue growth by attracting new clients and retaining existing customers.

Akamai Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from different business units or product lines, highlighting which areas are driving growth and where the company might need to adjust its strategy.

Chart InsightsAkamai's Security and Compute segments are driving growth, with Security showing a robust 10% year-over-year increase, bolstered by strong demand for solutions like Guardicore and API security. Compute revenue is also on the rise, projected to grow 15% in 2025. However, Delivery revenue continues to decline, down 9% year-over-year, reflecting ongoing challenges. Despite macroeconomic and geopolitical concerns, Akamai's strategic focus on high-demand security and cloud solutions positions it well for future growth, although caution remains around the Delivery segment's performance.

Data provided by:

The Fly

Akamai Earnings Call Summary

Earnings Call Date:Nov 06, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Feb 19, 2026

Earnings Call Sentiment Positive

Akamai reported strong financial results for Q3 2025, with significant growth in Cloud Infrastructure Services and security products. The launch of the Akamai Inference Cloud and strategic partnerships indicate positive future prospects. However, challenges remain in the delivery segment, which continues to see a revenue decline.

Q3-2025 Updates

Positive Updates

Strong Third Quarter Financial Performance

Akamai reported Q3 revenue of $1.055 billion, up 5% year-over-year. Non-GAAP operating margins improved to 31%, and non-GAAP EPS was $1.86, up 17% year-over-year.

Cloud Infrastructure Services Growth

Cloud Infrastructure Services revenue was $81 million, representing a 39% increase year-over-year. This marks an acceleration from the 30% growth rate in Q2.

High-Growth Security Products

Combined revenue from high-growth security products like API security and Zero Trust Enterprise Security grew 35% year-over-year.

Launch of Akamai Inference Cloud

Akamai launched the Akamai Inference Cloud to support AI Inference at the edge, with strong initial customer interest and partnerships with NVIDIA.

Significant Customer Wins

Akamai signed numerous new and expanded contracts, including a $37 million renewal with a multinational gaming company and a $31 million commitment with a major European bank.

Negative Updates

Delivery Revenue Decline

Delivery revenue decreased by 4% year-over-year, although it performed slightly better than expected.

Compute Revenue Challenges

Compute revenue, while growing, was slightly below expectations due to the timing of larger contracts ramping up later in the year.

Company Guidance

During the Akamai Technologies, Inc. Third Quarter 2025 Earnings Conference Call, the company provided comprehensive guidance for the fiscal year. Akamai reported revenue growth to $1.055 billion, a 5% year-over-year increase as reported and 4% in constant currency. The non-GAAP operating margin improved to 31%, with non-GAAP earnings per share rising to $1.86, up 17% year-over-year. The Cloud Infrastructure Services (CIS) revenue reached $81 million, marking a significant 39% growth year-over-year. Security revenue also saw a 10% year-over-year increase, reaching $568 million, driven by strong demand for high-growth security products like API security and Zero Trust Enterprise Security. Looking ahead, Akamai expects the combined ARR for its high-growth security solutions to rise by 30% to 35% year-over-year in constant currency. For the fourth quarter, revenue is projected between $1.065 billion and $1.085 billion, reflecting a 4% to 6% increase as reported. The company anticipates a non-GAAP operating margin of approximately 28% to 30% and EPS in the range of $1.65 to $1.85. Akamai emphasized its strategic transition towards cloud security and distributed cloud computing, highlighting the launch of Akamai Inference Cloud, which supports AI inference at the edge, and the deepening partnership with NVIDIA to enhance these capabilities.

Akamai Financial Statement Overview

Summary

Akamai demonstrates solid financial health with consistent revenue growth and profitability. The income statement shows steady revenue growth and stable net profit margins. The balance sheet indicates a moderate debt-to-equity ratio, suggesting increased leverage. The cash flow statement is strong, with positive free cash flow growth, although slightly lower than previous years.

Income Statement

Positive

Akamai's income statement shows a steady revenue growth with a TTM growth rate of 1.22%. The gross profit margin is healthy at 59.13%, although it has slightly decreased from previous years. The net profit margin is stable at 12.26%, indicating consistent profitability. However, the EBIT and EBITDA margins have seen a decline, suggesting increased operational costs or other expenses impacting earnings before interest and taxes.

Balance Sheet

Positive

The balance sheet reveals a moderate debt-to-equity ratio of 1.11, which has increased over the years, indicating higher leverage. The return on equity is reasonable at 10.86%, showing effective use of equity to generate profits. The equity ratio is stable, reflecting a balanced asset structure, but the rising debt levels could pose a risk if not managed carefully.

Cash Flow

Positive

Akamai's cash flow statement is strong, with a positive free cash flow growth rate of 5.80% in the TTM. The operating cash flow to net income ratio is robust at 1.57, indicating efficient cash generation from operations. The free cash flow to net income ratio is 0.48, showing a good conversion of income into free cash flow, although slightly lower than previous years.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.13B	3.99B	3.81B	3.62B	3.46B	3.20B
Gross Profit	2.44B	2.37B	2.30B	2.23B	2.19B	2.07B
EBITDA	1.41B	1.26B	1.24B	1.26B	1.35B	1.16B
Net Income	506.86M	504.92M	547.63M	523.67M	651.64M	557.05M
Balance Sheet
Total Assets	10.83B	10.37B	9.90B	8.30B	8.14B	7.76B
Cash, Cash Equivalents and Short-Term Investments	1.12B	1.60B	864.44M	1.11B	1.08B	1.10B
Total Debt	5.23B	4.63B	4.54B	3.17B	2.86B	2.78B
Total Liabilities	6.10B	5.49B	5.30B	3.94B	3.61B	3.51B
Stockholders Equity	4.73B	4.88B	4.60B	4.36B	4.53B	4.25B
Cash Flow
Free Cash Flow	718.30M	833.90M	618.40M	816.37M	859.33M	483.13M
Operating Cash Flow	1.50B	1.52B	1.35B	1.27B	1.40B	1.22B
Investing Cash Flow	-418.54M	-798.68M	-1.85B	-622.31M	-646.90M	-1.04B
Financing Cash Flow	-727.17M	-679.63M	443.38M	-634.18M	-562.00M	-223.64M

Akamai Technical Analysis

Technical Analysis Sentiment

Positive

Last Price91.92

Price Trends

50DMA

90.04

Positive

100DMA

83.89

Positive

200DMA

80.88

Positive

Market Momentum

MACD

1.97

Positive

RSI

48.00

Neutral

STOCH

18.86

Positive

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 91.92 is below the 20-day moving average (MA) of 93.71, above the 50-day MA of 90.04, and above the 200-day MA of 80.88, indicating a neutral trend. The MACD of 1.97 indicates Positive momentum. The RSI at 48.00 is Neutral, neither overbought nor oversold. The STOCH value of 18.86 is Positive, 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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AKAM	73 Outperform	$13.22B	26.95	10.64%	―	4.21%	-0.63%
FTNT	71 Outperform	$60.32B	33.40	228.04%	―	14.78%	22.52%
CRWD	66 Neutral	$104.71B	-328.76	-8.88%	―	22.05%	-341.24%
ZS	62 Neutral	$29.63B	-708.04	-2.41%	―	23.24%	-8.83%
NET	62 Neutral	$58.45B	-561.13	-8.88%	―	28.06%	-7.44%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SAIL	42 Neutral	$8.39B	-13.19	-10.58%	―	23.38%	-30.16%

* Technology Sector Average

Performance Comparison

AKAM

Akamai

91.92

-7.69

-7.72%

FTNT

Fortinet

81.12

-23.60

-22.54%

Zscaler

185.79

-18.44

-9.03%

CRWD

CrowdStrike Holdings

415.36

-5.15

-1.22%

NET

Cloudflare

166.88

25.36

17.92%

SAIL

SailPoint, Inc.

14.93

-9.62

-39.19%

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.Date of analysis: Dec 09, 2025