Akamai (AKAM) AI Stock Analysis

• Market Cap: $14.26B
• Dividend Yield: N/A
• Average Volume (3M): 4.50M
• Price to Earnings (P/E): 32.0
• Beta (1Y): 0.49
• Revenue Growth: 4.21%
• EPS Growth: -0.63%
• Country: US
• Employees: 10,811
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 1.84
• Shares Outstanding: 144,888,100
• 10 Day Avg. Volume: 5,519,196
• 30 Day Avg. Volume: 4,501,308
• PEG Ratio: -4.08
• Price to Book (P/B): 2.55
• Price to Sales (P/S): 3.01
• P/FCF Ratio: 18.14
• Enterprise Value/Market Cap: 1.41
• Enterprise Value/Revenue: 4.78
• Enterprise Value/Gross Profit: 8.26
• Enterprise Value/Ebitda: 14.57
• 1Y Price Target: $106.47
• Price Target Upside: 8.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): 7.29
• Revenue Forecast (FY): $4.42B

• Rating: 62 Neutral
• Price Target: $100.00 ▲(1.64% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

AKAM scores in the low 60s primarily due to mixed financial quality (margin compression, weaker FCF conversion, and higher leverage) despite strong operating cash generation. The earnings call supports the score with solid growth drivers in CIS/security and notable AI/inference traction, but elevated CapEx and expected margin pressure limit upside. Technicals are moderately supportive but near-overbought signals add caution, while valuation (P/E ~32 with no dividend yield provided) remains a drag.

Positive Factors

Operating cash generation

Akamai's TTM operating cash flow (~$1.52B) reflects durable cash generation from core CDN and security services. That steady OCF provides internal funding for network expansion, R&D and strategic investments, cushioning the business through elevated CapEx cycles and supporting long-term initiatives without immediate external financing.

Cloud Infrastructure Services (CIS) acceleration

Rapid CIS growth (45% YoY and management guidance of ~45–50% in 2026) signals a durable shift in Akamai's revenue mix toward higher‑growth compute offerings. As customers migrate to edge and cloud compute, CIS growth should produce stickier, contractually-backed revenue and improve long-term top-line velocity and strategic positioning.

AI/Inference commercial traction

A multi‑year $200M commitment and sold‑out initial GPU deployments indicate structural demand for Akamai's Inference Cloud. Early, contracted demand and plans to scale capacity provide multi-year revenue visibility and strengthen the firm's differentiation in edge inference, improving durable competitive positioning versus generalist cloud providers.

Negative Factors

Higher capital intensity and margin pressure

Management's guidance for materially higher CapEx (~23–26% of revenue) to build compute and Inference Cloud, combined with expected operating margin compression, implies sustained capital intensity. Elevated server/memory costs and GPU supply tightness lengthen payback periods and will weigh on margins and free cash flow until scale efficiencies materialize.

Rising leverage

Debt-to-equity rising to ~1.14 from ~0.95 reduces financial flexibility and increases balance-sheet risk. Higher leverage raises refinancing and interest-rate exposure, limits the firm's ability to opportunistically fund investments or repurchase stock, and makes the company more sensitive to macro or cyclical downturns over the coming quarters.

Weaker free cash flow conversion

A sharp decline in FCF (down ~265% y/y) and FCF representing only ~46% of net income indicate deteriorating cash conversion. Persistently weaker FCF constrains self‑funding for growth and increases reliance on debt or equity precisely while CapEx is rising, elevating execution and financing risk for multi‑year scaling efforts.

Akamai Business Overview & Revenue Model

Company Description

Akamai 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 Money

Akamai 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 Financial Statement Overview

Summary

Results are mixed: a very large TTM revenue jump is offset by margin compression (net margin ~10.7% TTM vs higher historically), weaker free-cash-flow dynamics (FCF down sharply y/y and only ~46% of net income), and higher leverage (debt-to-equity ~1.14 TTM), despite solid gross margin (~59%) and strong operating cash flow (~$1.52B TTM).

Income Statement

TTM (Trailing-Twelve-Months) revenue growth is strong (up ~181%), but profitability has softened versus prior years: net margin is ~10.7% TTM vs ~12.7% in 2024 and ~14–19% in 2020–2023, with similar compression in operating and EBITDA margins. Gross margin remains solid (~59% TTM) but is also down from the low-to-mid 60% range earlier in the period—overall pointing to a strong top-line jump with weaker efficiency and earnings quality than the company’s own history.

Balance Sheet

Leverage has increased meaningfully: debt-to-equity is ~1.14 TTM versus ~0.95 in 2024 and ~0.63–0.99 in 2020–2023, which raises financial risk and reduces flexibility. Equity and assets have grown over time, and returns on equity remain steady around ~10–12% (TTM ~10.9%), but the higher debt load is the key offset.

Cash Flow

Operating cash flow is strong and stable (TTM ~$1.52B, similar to 2024), supporting the business’s cash-generating profile. However, free cash flow declined TTM (down ~265% year over year) and free cash flow is only ~46% of net income TTM (and ~55–64% in several prior years), indicating weaker cash conversion and/or higher cash outflows versus the earnings level.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.21B	3.99B	3.81B	3.62B	3.46B
Gross Profit	2.30B	2.37B	2.30B	2.23B	2.19B
EBITDA	1.34B	1.26B	1.24B	1.26B	1.35B
Net Income	452.03M	504.92M	547.63M	523.67M	651.64M
Balance Sheet
Total Assets	11.48B	10.37B	9.90B	8.30B	8.14B
Cash, Cash Equivalents and Short-Term Investments	1.19B	1.60B	864.44M	1.11B	1.08B
Total Debt	6.91B	4.63B	4.54B	3.17B	2.86B
Total Liabilities	6.50B	5.49B	5.30B	3.94B	3.61B
Stockholders Equity	4.98B	4.88B	4.60B	4.36B	4.53B
Cash Flow
Free Cash Flow	699.26M	833.90M	618.40M	816.37M	859.33M
Operating Cash Flow	1.52B	1.52B	1.35B	1.27B	1.40B
Investing Cash Flow	-540.74M	-798.68M	-1.85B	-622.31M	-646.90M
Financing Cash Flow	-588.04M	-679.63M	443.38M	-634.18M	-562.00M

Akamai Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 98.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 98.39 is below the 20-day moving average (MA) of 99.15, above the 50-day MA of 94.25, and above the 200-day MA of 82.53, indicating a neutral trend. The MACD of 1.77 indicates Positive momentum. The RSI at 50.04 is Neutral, neither overbought nor oversold. The STOCH value of 33.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AKAM.

Akamai Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTNT	72 Outperform	$58.48B	32.57	135.72%	―	14.78%	22.52%
ZS	66 Neutral	$23.63B	-344.16	-3.56%	―	23.24%	-8.83%
AKAM	62 Neutral	$14.26B	31.99	9.17%	―	4.21%	-0.63%
CRWD	62 Neutral	$93.78B	-294.43	-8.88%	―	22.05%	-341.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NET	57 Neutral	$60.64B	-584.69	-8.16%	―	28.06%	-7.44%
SAIL	41 Neutral	$7.92B	-12.46	-10.58%	―	23.38%	-30.16%

Akamai Corporate Events

Akamai Adopts 2026 Performance-Based Executive Compensation Plan

On February 11, 2026, Akamai’s board committee approved a 2026 bonus and equity compensation framework for its top executives, tying annual incentives to revenue and adjusted operating income targets, with all bonuses paid in vested stock rather than cash. The plan also incorporates an ESG modifier of plus or minus 10%, signaling continued alignment of leadership rewards with financial performance, sustainability priorities and shareholder value.

For CEO F. Thomson Leighton, the committee set a nominal $1 base salary and a stock-settled target bonus of $1.5 million, alongside sizable RSU grants, while other named executives received market-level salaries with target bonuses ranging from 80% to 100% of base and high leverage at maximum performance. Additional multi-year RSU awards, linked to three-year revenue, non-GAAP EPS and relative TSR versus the S&P 500 through 2028, further emphasize long-term value creation and competitive positioning in executive pay practices.

The 2026 annual RSUs will vest over three years, while performance-based RSUs tied to financial metrics will be earned over fiscal 2026–2028 and vest after certification of 2028 results. Stock performance-based RSUs will vest based on Akamai’s total shareholder return percentile within the S&P 500, with no payout below the 25th percentile and up to 200% of target at the 75th percentile, reinforcing performance sensitivity and alignment with shareholders’ returns.

The most recent analyst rating on (AKAM) stock is a Buy with a $125.00 price target. To see the full list of analyst forecasts on Akamai stock, see the AKAM Stock Forecast page.