Key Highlights
- Bank of America elevated AKAM to Buy rating, increasing price target from $130 to $175
- Shares surged 7.7% to reach $161.14, the highest closing price since March 2000
- A massive $1.8 billion, 7-year agreement — believed to involve Anthropic — is fueling AI growth expectations
- Shares have skyrocketed 57% during May and 86% for the year
- Cloud Infrastructure Services revenue jumped 40% year-over-year, compensating for a 7% drop in delivery operations
Akamai Technologies (AKAM) finished Wednesday’s trading session at $161.14, registering a 7.7% gain and achieving its strongest closing price since March 29, 2000.
Akamai Technologies, Inc., AKAM
The driving force: Bank of America analyst Tal Liani upgraded the stock to Buy while boosting his price target from $130 to $175 — suggesting approximately 8% additional upside potential from Wednesday’s closing price.
The positive revision follows Akamai’s announcement last week of a $1.8 billion, 7-year agreement. The company revealed that a “leading frontier model provider” had signed up for its cloud infrastructure offerings. Bloomberg subsequently identified the client as AI startup Anthropic, though neither party has officially verified this information to Barron’s.
Liani noted in his research that “the narrative has evolved from a traditional delivery network into a legitimate AI infrastructure platform.” He referenced the agreement as proof of genuine market demand for distributed artificial intelligence capabilities, beyond mere speculation.
The analyst projects the contract will contribute $20–25 million in quarterly revenue beginning in the fourth quarter.
AKAM ranked among the S&P 500’s strongest performers on Wednesday. The stock has now rallied 57% throughout May and 86% since the beginning of the year. However, it remains 51% below its record closing high of $327.62 achieved on December 31, 1999.
Cloud Infrastructure Momentum Powers Rating Increase
Bank of America highlighted the 40% year-over-year expansion in Akamai’s Cloud Infrastructure Services division as a primary justification for the upgraded rating. This expansion is being fueled by AI workloads and what Liani described as “edge inference applications.”
Security services revenue also climbed 11% year-over-year. The legacy delivery services segment declined 7% — though analysts seem prepared to overlook this weakness currently.
Liani characterized the CIS division as reaching “an inflection point,” with positive momentum capable of driving accelerating annual profit expansion.
Morgan Stanley Maintains Positive Outlook
Morgan Stanley analysts, who maintain an Overweight stance on AKAM, observed on Friday that the $1.8 billion contract eclipsed what was already a strong Q1 earnings performance. Akamai exceeded first-quarter projections and increased the lower boundary of its full-year earnings forecast.
This agreement represents the largest in Akamai’s corporate history. Morgan Stanley analysts indicated it demonstrates the company is now “solidly positioned within the AI narrative” — a perspective that has clearly resonated with the investment community.
Among 29 analysts surveyed by FactSet, Akamai holds an average Overweight rating with a consensus price target of $155.46.
GF Score metrics position Akamai at 88/100, with profitability and growth each scoring 9/10. Financial strength registers at 5/10, and the current P/E ratio of 53.83x significantly exceeds the historical median of 30.96x.
A cautionary note: company insiders have divested roughly $9.7 million worth of AKAM shares during the previous three months, with zero insider purchases recorded. Bank of America identified ongoing risks, including uncertainties about 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 totals approximately $23.24 billion.
