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Valued at a market cap of $11.6 billion, Akamai Technologies, Inc. (AKAM) provides security, delivery, and cloud computing solutions. The Cambridge, Massachusetts-based company offers core services across content delivery, cloud security, web and mobile performance optimization, edge computing, and enterprise cloud solutions, and serves a diverse client base, including e-commerce, telecoms, media, and financial services.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and AKAM fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the software - infrastructure industry. The company's core strength lies in its globally distributed edge network, one of the largest and most advanced in the world, which enables it to deliver fast, reliable, and secure internet experiences across diverse industries. Its ability to combine performance, security, scalability, and global reach makes it a trusted partner for many of the world’s leading digital businesses.
This tech company has dipped 25.8% from its 52-week high of $106.80, reached on Oct. 18, 2024. Shares of AKAM have declined 2.2% over the past three months, underperforming the iShares Cybersecurity and Tech ETF’s (IHAK) 6.3% rise during the same time frame.
In the longer term, AKAM has fallen 10.8% over the past 52 weeks, considerably lagging behind IHAK’s 16.1% return over the same time frame. Moreover, on a YTD basis, shares of AKAM are down 17.1%, compared to IHAK’s 5.6% uptick.
To confirm its bearish trend, AKAM has been trading below its 200-day moving over the past year, with some fluctuations. However, it has started trading above its 50-day moving average since early June.
On May 8, AKAM released its Q1 earnings results. The company’s revenue improved 2.9% year-over-year to $1 billion and marginally topped the consensus estimates. Moreover, its adjusted earnings came in at $1.70 per share, up 3.7% from the year-ago quarter and 7.6% above Wall Street expectations. However, despite delivering a stronger-than-expected performance, AKAM’s shares crashed 10.8% in the following trading session. The sharp fall in its share price was likely driven by a notable drop in its delivery revenue and underwhelming fiscal 2025 adjusted EPS guidance of $6.10 to $6.40, which might have raised investor concerns about the company’s near-term growth prospects.
Akamai Technologies has also significantly underperformed its rival, Cloudflare, Inc. (NET), which surged 135.9% over the past 52 weeks and 70.8% on a YTD basis.
Despite AKAM’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 21 analysts covering it, and the mean price target of $99.60 suggests a 25.6% premium to its current price levels.
