Company Reports

Akamai announced a seven-year $11.6 billion cloud computing deal with Anthropic, with an option to grow to $20.6 billion. As part of the deal, Akamai issued Anthropic warrants for about 7.7 million shares, 40% of which are vested, with the remaining 60% vesting if Anthropic adds workloads.

Akamai has shifted from primarily a content delivery network to a security and cloud computing business anchored by its 4,400 points of presence. Through two deals with Anthropic totaling $13.3 billion, the firm has solidly committed itself to enabling artificial intelligence inference. A continued focus on security offerings seems prudent given ongoing headwinds in content delivery and the rise in AI-related security breaches. We still believe that content delivery will remain profitable, but we increasingly view the delivery network as largely an accessory to the security business.

Akamai’s original business, content delivery networks, is in slow decline as data transmission prices have decreased faster than data volumes have increased. We still believe that content delivery will remain profitable, but we increasingly view the delivery network as an accessory to the security business. The continued focus on security offerings seems prudent given the continuing headwinds in content delivery. Despite our favorable view on the security business, we believe the market has an overly optimistic assessment of Akamai’s compute opportunity with Anthropic, which we see as largely commoditized.

Akamai’s original business, content delivery networks, is in slow decline as data transmission prices have decreased faster than data volumes have increased. We still believe that content delivery will remain profitable, but we increasingly view the delivery network as an accessory to the security business. The continued focus on security offerings seems prudent given the continuing headwinds in content delivery. Despite our favorable view on the security business, we believe the market has an overly optimistic assessment of Akamai’s compute opportunity with Anthropic, which we see as largely commoditized.

Akamai reported good results with 39% cloud computing growth offsetting declines in delivery revenue. Management guidance for the third quarter was a little light, but was overshadowed by the announcement of a four-year, $600 million cloud infrastructure service deal to power robotics development.

We are transferring coverage of Akamai, a distributed network operator offering content delivery, security, and computing services to enterprises. Akamai's network underpins 15%-30% of global web traffic, and it uses the data it generates to improve its security services.

Akamai’s original business, content delivery networks, is in slow decline as data transmission prices have decreased faster than data volumes have increased. We still believe that content delivery will remain profitable, but we increasingly view the delivery network as an accessory to the security business. The continued focus on security offerings seems prudent given the continuing headwinds in content delivery. Despite our favorable view on the security business, we believe the market has an overly optimistic assessment of Akamai’s compute opportunity with Anthropic, which we see as largely commoditized.

Akamai reported strong first-quarter results, with revenue up 6%, as the security business grew 11% and cloud infrastructure grew 40%, offset by a 7% decline in the content delivery network. A $1.8 billion commitment from a leading frontier model provider showcases Akamai’s CIS potential.

Akamai has successfully repositioned itself to benefit from trends such as the increasing need for cybersecurity and edge computing. Its legacy content delivery network may be the firm’s foundation, but it only accounts for a third of revenue today. We think continued growth in its security and computing businesses will drive incremental value for the firm and strengthen its competitive positioning.

Akamai reported solid fourth-quarter results, topping management’s top-line guidance with 5% revenue growth for the year, but it also issued aggressive capital expenditure guidance, which is now expected to increase from 19.5% of revenue in 2025 to 24.5% (at the midpoint) in 2026.

Akamai reported strong third-quarter results, as continued momentum in the security and compute businesses, up on a constant-currency basis by 9% and 7%, respectively, propelled margin expansion and led management to raise its 2025 revenue and margin forecasts.

Akamai has successfully repositioned itself to benefit from trends such as the increasing need for cybersecurity and edge computing. Its legacy content delivery network may be the firm’s foundation, but it only accounts for a third of revenue today. We think continued growth in its security and computing businesses will drive incremental value for the firm and strengthen its competitive positioning.

Akamai has successfully repositioned itself to benefit from trends such as the increasing need for cybersecurity and edge computing. Its legacy content delivery network may be the firm’s foundation, but it only accounts for a third of revenue today. We think continued growth in its security and computing businesses will drive incremental value for the firm and strengthen its competitive positioning.

Akamai posted solid results in second quarter, as normalizing delivery revenue and steady security and computing growth drove a 6.5% improvement in revenue year over year. Profitability was also a highlight, leading management to raise full-year guidance for revenue, profits, and earnings per share.

Akamai has successfully repositioned itself to benefit from trends such as the increasing need for cybersecurity and edge computing. Its legacy content delivery network may be the firm’s foundation, but it only accounts for a third of revenue today. We think continued growth in its security and computing businesses will drive incremental value for the firm and strengthen its competitive positioning.

Akamai's revenue grew 4% year on year in constant currency for the first quarter, mainly due to stabilizing content delivery revenue, which was down 8% versus last year, but improved slightly sequentially. An impressive adjusted operating margin of 30% was the highest first quarter since 2021.

Akamai has successfully repositioned itself to benefit from trends such as the increasing need for cybersecurity and edge computing. Its legacy content delivery network may be the firm’s foundation, but it only accounts for a third of revenue today. We think continued growth in its security and computing businesses will drive incremental value for the firm and strengthen its competitive positioning.

Akamai’s fourth-quarter and full-year 2024 results revealed steady growth in the firm’s computing and security businesses, which now account for over two-thirds of firmwide revenue. Although results aligned with our expectations, after taking a fresh look at the company, we’ve upgraded our moat rating for Akamai to narrow from none. We think the firm has continued to drive value through its security and computing businesses, enhancing the value of its legacy content delivery business and ultimately increasing the stickiness of its platform. We’ve also raised our fair value estimate to $135 from $100 to account for our view of the firm’s long-term competitive position.

Akamai has successfully repositioned itself to benefit from trends such as the increasing need for cybersecurity and edge computing. Its legacy content delivery network may be the firm’s foundation, but it only accounts for a third of revenue today. We think continued growth in its security and computing businesses will drive incremental value for the firm and strengthen its competitive positioning.

Accelerating growth in compute revenue—one of the two areas behind Akamai’s bright long-term prospects—wasn’t enough to quell the market’s disappointment with modestly weaker security growth, margin contraction, and a slight reduction in full-year guidance. The plummeting of delivery revenue, which we expect to be in long-term decline, showed no signs of improvement. However, nothing in the third quarter’s results changes our long-term expectations for Akamai, and we are maintaining our $100 fair value estimate.