Key Highlights
- Bank of America analyst upgraded AKAM to Buy, boosting the price target from $130 to $175
- Shares climbed 7.7% to reach $161.14, the strongest closing price since March 2000
- A massive $1.8 billion, seven-year contract — believed to be with Anthropic — fuels optimism around AI infrastructure growth
- Year-to-date gains stand at 86%, with May alone delivering 57% returns
- Cloud Infrastructure Services revenue surged 40% annually, counterbalancing a 7% drop in legacy delivery operations
Shares of Akamai Technologies (AKAM) ended Wednesday’s trading session at $161.14, registering a robust 7.7% gain and achieving the company’s best closing price since March 29, 2000.
Akamai Technologies, Inc., AKAM
The driving force behind the rally: Bank of America analyst Tal Liani elevated his stance on the stock to Buy, simultaneously lifting his price objective from $130 to $175 — suggesting approximately 8% additional upside from current levels.
This revised outlook follows Akamai’s announcement last week of a substantial $1.8 billion, seven-year agreement with what the company described as a “leading frontier model provider” for its cloud infrastructure offerings. Bloomberg subsequently identified the client as AI startup Anthropic, though neither party has officially verified this 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 positioned the contract as tangible proof of genuine market appetite for distributed artificial intelligence capabilities, moving beyond mere speculation.
The analyst forecasts the agreement will contribute between $20 million and $25 million in quarterly revenue beginning in the fourth quarter.
AKAM ranked among the S&P 500’s strongest performers on Wednesday. The equity has now appreciated 57% during May and 86% since the beginning of the year. Despite this remarkable run, shares remain 51% below the all-time closing record of $327.62 established on December 31, 1999.
AI-Powered Cloud Growth Underpins Positive Outlook
Bank of America highlighted the impressive 40% year-over-year expansion in Akamai’s Cloud Infrastructure Services division as a primary justification for the rating enhancement. This acceleration is being propelled by artificial intelligence workloads and what Liani characterized as “edge inference use cases.”
The company’s security services division also demonstrated healthy momentum with 11% annual growth. Meanwhile, the traditional delivery services business contracted 7% — a decline that analysts currently seem prepared to overlook given the strength elsewhere.
Liani characterized the CIS segment as reaching “an inflection point,” with operational momentum capable of driving faster annual earnings growth going forward.
Morgan Stanley Maintains Optimistic Stance
Morgan Stanley’s research team, which holds an Overweight recommendation on AKAM, observed last Friday that the $1.8 billion contract announcement overshadowed what was already a strong first-quarter financial performance. The company exceeded Q1 forecasts and lifted the bottom range of its full-year profit guidance.
This contract represents the largest in Akamai’s corporate history. Morgan Stanley’s analysts indicated it demonstrates that the company has become “firmly entrenched in the AI narrative” — a perspective that has clearly resonated throughout the investment community.
Among 29 Wall Street analysts tracked by FactSet, Akamai holds an average Overweight rating accompanied by a consensus price target of $155.46.
According to GF Score metrics, Akamai registers 88 out of 100, with profitability and growth components each scoring 9 out of 10. Financial strength registers at 5 out of 10, while the current price-to-earnings ratio of 53.83x significantly exceeds the historical median of 30.96x.
A cautionary signal: company insiders have offloaded roughly $9.7 million worth of AKAM shares during the previous three months, with zero insider purchases documented. Bank of America acknowledged that uncertainties persist, particularly regarding the sustainability of CIS expansion and Akamai’s competitive positioning against major hyperscale cloud providers over the long term.
As of Wednesday’s market close, AKAM commands a market capitalization of 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
