Key Highlights
- Bank of America elevated AKAM to Buy status, increasing the price target from $130 to $175
- Shares climbed 7.7% to reach $161.14, the highest level since March 2000
- An $1.8 billion seven-year contract — believed to be with Anthropic — is fueling optimism around AI infrastructure
- Shares have surged 57% in May alone and are up 86% year-to-date
- Cloud Infrastructure Services segment expanded 40% year-over-year, balancing a 7% drop in delivery operations
Akamai Technologies (AKAM) finished Wednesday’s trading session at $161.14, posting a 7.7% gain and reaching its strongest close since March 29, 2000.
Akamai Technologies, Inc., AKAM
The driving force: Bank of America analyst Tal Liani upgraded the stock to Buy and lifted his price objective from $130 to $175 — suggesting approximately 8% additional upside potential from Wednesday’s closing price.
This rating change follows Akamai’s announcement last week of an $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 customer as AI startup Anthropic, though neither party has officially confirmed this to Barron’s.
Liani noted in his report that “the story has shifted from a legacy delivery network to a credible AI infrastructure platform.” He views the contract as concrete proof of genuine demand for distributed AI capabilities, rather than mere speculation.
The analyst projects the agreement will generate $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 rallied 57% during May and 86% since the start of the year. Despite this impressive run, shares remain 51% below their all-time closing peak of $327.62 recorded on December 31, 1999.
AI-Driven Cloud Growth Underpins Positive Outlook
Bank of America highlighted the 40% year-over-year expansion in Akamai’s Cloud Infrastructure Services division as a primary rationale for the upgrade. This robust growth is being propelled by AI workloads and what Liani described as “edge inference use cases.”
The security services division also posted solid 11% year-over-year growth. Meanwhile, delivery services, representing the company’s traditional business, declined 7% — though analysts seem prepared to overlook this weakness for the time being.
Liani characterized the CIS segment as being “at an inflection point,” with momentum sufficient to drive accelerating annual profit expansion.
Morgan Stanley Maintains Optimistic Stance
Morgan Stanley analysts, who maintain an Overweight rating on AKAM, observed on Friday that the $1.8 billion contract eclipsed what was already a strong first-quarter earnings performance. Akamai exceeded Q1 expectations and increased the lower bound of its full-year earnings forecast.
This represents Akamai’s largest contract ever. Morgan Stanley analysts indicated it demonstrates the company is now “firmly entrenched in the AI narrative” — a perspective that has clearly resonated with the investment community.
Among 29 analysts tracked by FactSet, Akamai holds an average Overweight rating with a consensus price objective of $155.46.
GF Score metrics place Akamai at 88/100, with both profitability and growth scoring 9/10. Financial strength registers at 5/10, and the current P/E ratio of 53.83x substantially exceeds the historical median of 30.96x.
A cautionary note: company insiders have divested roughly $9.7 million worth of AKAM shares over the last three months, with zero insider purchases recorded. Bank of America acknowledged that risks persist, including uncertainties about the sustainability of CIS growth and Akamai’s long-term competitive positioning against hyperscale cloud providers.
As of Wednesday’s market close, AKAM’s market capitalization stood at approximately $23.24 billion.
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