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Valued at a market cap of $15.2 billion, Akamai Technologies, Inc. (AKAM) is a global provider of cloud computing, security, and content delivery services. The Cambridge, Massachusetts-based company operates within the technology sector, offering solutions that enhance web performance, secure applications, and deliver media across the internet.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Akamai Technologies fits this criterion perfectly. Akamai Technologies is renowned for its globally distributed Intelligent Edge Platform, which enables rapid, secure content delivery and real-time internet traffic optimization for major enterprises.
Even after factoring in a notable 22.4% pullback from its 52-week high of $129.17, recorded in February, Akamai Technologies' shares have increased 12.8% over the past three months, outperforming the broader Nasdaq Composite's ($NASX) 1.3% gain during the same period.
Nevertheless, in the longer term, AKAM stock has declined 15.9% on a YTD basis, which lags behind NASX's 19.6% increase over the same period. Moreover, AKAM has dropped 8.3% over the past 52 weeks, compared to NASX's 33.3% gains.
AKAM has consistently traded below its 200-day moving average since April but has been trading above the 50-day moving average since July.
Akamai's underperformance over the past year is largely due to a decline in its legacy content delivery network (CDN) segment, coupled with slower adoption of its newer security and compute services. Also, increased competition in the cybersecurity market and the challenges of transitioning its business model have contributed to revenue volatility and investor concerns.
However, the stock surged 10.9% following its better-than-expected Q2 adjusted EPS of $1.58 and revenue of $979.6 million on Aug. 8. Additionally, the company forecasted Q3 revenue and profit above analyst estimates, driven by strong demand for its cybersecurity services amid rising threats.
In contrast, rival Cloudflare, Inc. (NET) is outperforming AKAM, with NET stock gaining 37.4% over the past 52 weeks despite a slight dip on a YTD basis.
Despite AKAM's underperformance over the past year, analysts remain moderately bullish about its prospects. Among the 20 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and the mean price target of $117.06 is a premium of 17.6% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
