Akamai Secures Largest Customer Deal in History
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy AKAM?
Source: stocktwits
- Historic Deal: Akamai announced during its Q1 earnings call that it secured an $1.8 billion customer deal, marking the largest in its history, which is expected to significantly boost future revenues and solidify its position in the cloud infrastructure market.
- Expanding Customer Base: CEO Leighton highlighted that Akamai's customer base is rapidly expanding, particularly in AI infrastructure, with multiple enterprises choosing Akamai for its high performance and reliability, indicating strong market demand for its services.
- Financial Performance Exceeds Expectations: Akamai reported Q1 earnings per share of $1.61 on revenue of $1.074 billion, surpassing Wall Street estimates, and provided an optimistic outlook for Q2 with EPS guidance of $1.45 to $1.65, further reinforcing investor confidence.
- Positive Market Reaction: Akamai's stock surged nearly 30% in pre-market trading, up 34% year-to-date, reflecting strong investor confidence in its growth potential, particularly with ongoing expansions in the AI sector.
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Analyst Views on AKAM
Wall Street analysts forecast AKAM stock price to fall
11 Analyst Rating
6 Buy
5 Hold
0 Sell
Moderate Buy
Current: 116.690
Low
89.00
Averages
103.73
High
115.00
Current: 116.690
Low
89.00
Averages
103.73
High
115.00
About AKAM
Akamai Technologies, Inc. is a cybersecurity and cloud computing company. The Company develops and provides solutions for global enterprises to build, secure and accelerate their applications and digital experiences. Akamai Connected Cloud, the Company's platform, is comprised of an edge and cloud architecture and underlying network for cloud computing, security and content delivery services. Its cloud computing services include compute, storage, networking, database and container management services that are required to build, deploy and secure applications and workloads. Its security solutions are designed to keep infrastructure, websites, applications, application programming interfaces and users safe from a multitude of cyberattacks and online threats while improving performance. Its content delivery solutions consist of Web and mobile performance focused solutions and media delivery solutions. It also specializes in serverless WebAssembly function-as-a-service (FaaS) technology.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Solid Earnings Report: The company reported a 6% year-over-year revenue increase in Q1, surpassing $1 billion, with cloud infrastructure services revenue soaring 40% to $95 million and security revenue up 11% to $590 million, showcasing its competitive edge in the rapidly growing cloud market.
- Optimistic Future Outlook: Akamai expects Q2 revenue between $1.08 billion and $1.1 billion, with adjusted net income per share projected between $1.45 and $1.65, indicating strong confidence in sustained growth and robust market demand.
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- Solid Earnings Report: The company reported a 6% year-over-year revenue increase in Q1, surpassing $1 billion, with cloud infrastructure services revenue soaring 40% to $95 million and security revenue up 11% to $590 million, showcasing its competitive edge in the rapidly growing cloud market.
- Optimistic Future Outlook: Akamai expects Q2 revenue between $1.08 billion and $1.1 billion, with adjusted net income per share projected between $1.45 and $1.65, indicating strong confidence in sustained growth and robust market demand.
- Strategic Positioning in AI Economy: Akamai is scaling its cloud infrastructure business to meet rising AI workload demands and plans to enhance resource management capabilities, positioning itself favorably in the emerging AI economy to strengthen its market competitiveness.
See More
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- Volume Spike: The trading volume reached 150.9 million shares, approximately 389% above the three-month average of 30.6 million shares, indicating strong investor interest and heightened market activity surrounding the company's prospects.
- Financial Recovery: The company reported a 2% year-over-year revenue increase to $678 million in Q1, with a net income of about $8 million, signaling a return to profitability after a 66% decline since its IPO, which has bolstered investor confidence.
- Divergent Cloud Revenue: Public cloud revenue grew to $443 million while private cloud revenue fell to $235 million, highlighting performance disparities across different cloud service segments, necessitating attention on how to convert the AMD partnership into sustainable revenue streams.
See More
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- Support from Employment Data: U.S. nonfarm payrolls for April increased by 115,000, surpassing expectations of 65,000, with March figures revised up to 185,000, indicating resilience in the labor market and further boosting stock prices.
- Decline in Consumer Confidence: The University of Michigan's May consumer sentiment index fell to a record low of 48.2, below the expected 49.5, highlighting economic uncertainty that could impact future consumer spending.
- Oil Market Volatility: Iran's seizure of an oil tanker in the Strait of Hormuz led to a rise in WTI crude prices, with expectations that this incident will affect global oil supply, potentially causing further price fluctuations.
See More
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- Volume Spike: The company's trading volume reached 150.9 million shares, approximately 389% above its three-month average of 30.6 million shares, reflecting heightened investor interest and positive market sentiment regarding the new collaboration.
- Financial Recovery: Rackspace reported a 2% increase in first-quarter revenue to $678 million, achieving a net income of about $8 million, marking a return to profitability; while private cloud revenue declined to $235 million, public cloud revenue grew to $443 million, showcasing potential for business restructuring.
- Future Outlook: Although the agreement with AMD is still a framework rather than a confirmed revenue contract, it provides Rackspace with a more targeted AI offering, particularly for regulated industries like healthcare and finance, which is expected to drive sustained revenue growth in the future.
See More
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- Volume Spike: The company's trading volume reached 150.9 million shares, approximately 389% above the three-month average of 30.6 million shares, reflecting heightened investor interest and positive market sentiment regarding the new collaboration.
- Financial Recovery: First-quarter revenue increased by 2% to $678 million, with a net income of about $8 million, marking a return to profitability; despite a decline in private cloud revenue to $235 million, public cloud revenue grew to $443 million, indicating a shift in business dynamics.
- Strategic Partnership Outlook: The collaboration with AMD provides Rackspace with a more targeted AI offering, and although it remains a framework agreement, the demand for infrastructure that meets security and compliance requirements in regulated sectors like healthcare and finance is expected to drive future revenue growth.
See More
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- Tech Stock Recovery: Late Friday afternoon, tech stocks showed an overall increase, reflecting a gradual restoration of market confidence in the tech sector, likely driven by optimistic investor expectations for future growth.
- Improved Market Sentiment: The rise in tech stocks has led to improved investor sentiment, indicating a strengthened confidence in economic recovery, which may attract more capital into the tech sector.
- Investor Focus Shift: The uptick in tech stocks has drawn investor attention, particularly in the current economic climate where the tech sector is viewed as a primary growth driver, potentially influencing future investment decisions.
- Optimistic Industry Outlook: Analysts generally maintain an optimistic outlook for the tech industry, believing that as digital transformation accelerates, tech companies will continue to benefit from growing market demand.
See More
