Key Highlights
- Bank of America elevated AKAM to Buy rating and lifted price target from $130 to $175
- Shares surged 7.7% to reach $161.14, the highest closing price since March 2000
- Momentum fueled by a massive $1.8 billion, 7-year contract — believed to be with Anthropic
- The equity has rallied 57% in May alone and 86% throughout the current year
- Cloud Infrastructure Services segment expanded 40% year-over-year, counterbalancing delivery services’ 7% contraction
Shares of Akamai Technologies (AKAM) finished Wednesday’s trading session at $161.14, representing a robust 7.7% advance and establishing the company’s loftiest closing level since March 29, 2000.
Akamai Technologies, Inc., AKAM
The driving force: Bank of America analyst Tal Liani initiated a Buy rating while simultaneously boosting his price objective from $130 to $175 — suggesting approximately 8% additional upside potential from Wednesday’s closing value.
This rating enhancement follows last week’s announcement of a substantial $1.8 billion, 7-year agreement between Akamai and what the company described as a “leading frontier model provider” for cloud infrastructure services. Bloomberg subsequently identified the client as AI startup Anthropic, though neither party has officially confirmed this information to Barron’s.
In his research note, Liani emphasized that “the story has shifted from a legacy delivery network to a credible AI infrastructure platform.” He characterized the contract as tangible proof of authentic demand for distributed artificial intelligence capabilities, transcending mere speculation.
The analyst anticipates the agreement will contribute $20–25 million in quarterly revenue beginning in the fourth quarter.
AKAM ranked among the S&P 500’s strongest performers Wednesday. The stock has now appreciated 57% during May and 86% since the year began. Despite this impressive run, shares remain 51% beneath their record closing high of $327.62 established on December 31, 1999.
Cloud Infrastructure Segment Powers Analyst Optimism
Bank of America highlighted the robust 40% year-over-year expansion in Akamai’s Cloud Infrastructure Services division as a primary rationale behind the upgraded rating. This growth trajectory is being propelled by artificial intelligence workloads and what Liani described as “edge inference use cases.”
The Security services division also demonstrated strength with 11% year-over-year growth. Delivery services, representing the company’s traditional business operations, declined 7% — though analysts currently appear willing to overlook this weakness.
Liani characterized the CIS segment as reaching “an inflection point,” possessing momentum capable of sustaining accelerating annual profit expansion.
Morgan Stanley Echoes Positive Sentiment
Morgan Stanley’s research team, maintaining an Overweight stance on AKAM, observed Friday that the $1.8 billion contract announcement eclipsed what already represented a respectable Q1 earnings performance. Akamai exceeded first-quarter analyst estimates and elevated the lower boundary of its full-year earnings guidance.
The contract represents Akamai’s largest in company history. Morgan Stanley’s analysts indicated it demonstrates the company is now “firmly entrenched in the AI narrative” — a perspective that has clearly resonated with market participants.
Among 29 analysts surveyed by FactSet, Akamai maintains an average Overweight recommendation with a consensus price objective of $155.46.
GF Score metrics position Akamai at 88/100, with both profitability and growth metrics earning 9/10 ratings. Financial strength registers at 5/10, while the current price-to-earnings ratio of 53.83x substantially exceeds the historical median of 30.96x.
A cautionary element: company insiders have divested approximately $9.7 million worth of AKAM shares throughout the previous three months, with zero reported purchases. Bank of America acknowledged that risks persist, including uncertainties regarding CIS growth sustainability and Akamai’s competitive positioning against hyperscale cloud providers over the long term.
As of Wednesday’s market close, AKAM’s market capitalization totaled approximately $23.24 billion.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
