Akamai Stock Posts Best Week Since 2013 On Buzz Of $1.8B Anthropic Cloud Deal

• Akamai stock gained over 40% last week.
• Akamai provides cloud computing, cybersecurity, and content delivery network services that help businesses run websites, apps, video and digital content faster.
• Stocktwits sentiment for AKAM has remained ‘extremely bullish’ since Thursday.

Akamai Technologies' stock posted its best weekly gains since April 2013 and hit a record high, after the enterprise web infrastructure company announced a major cloud deal with an AI company.

Akamai stock gained 27% on Friday, taking the week’s total to 42%, after it said that “a leading frontier model provider has committed to $1.8 billion over seven years for CIS (cloud infrastructure services)”. Although it did not name the mystery customer, Bloomberg and other media outlets reported that it was Anthropic.

Anthropic On Cloud Deal Spree 

Anthropic has announced a series of deals for additional cloud capacity in recent months as demand for its Claude software has soared. The AI company, which is preparing for an initial public offering, has struck or expanded deals with CoreWeave, Amazon, Google, Broadcom and xAI (through SpaceX).

At a conference after the SpaceX deal was announced last week, Anthropic CEO Dario Amodei said his company is “working as quickly as possible” to secure more computing resources after experiencing “80x growth” in annualized revenue and usage in the first quarter of this year.

Akamai provides cloud computing, cybersecurity, and content delivery network (CDN) services that help businesses run websites, apps, video, and digital content faster and more securely over the internet. Its customers range from hyperscalers, streaming platforms, and gaming companies to banks, retailers, and governments.

Akamai’s Q2 Forecast Underwhelms

The AI deal came as a shot in the arm for Akamai, whose shares had been under pressure alongside other software companies amid a broad-based sector selloff in recent months. 

To be sure, Thursday’s announcement coincided with the company’s quarterly report, which included a softer-than-expected forecast for the current quarter that Akamai attributed to higher component costs.

Akamai forecast second-quarter revenue of between $1.08 billion ​and $1.10 billion, compared with analyst estimates of $1.10 billion from LSEG/Reuters. Its adjusted profit forecast of $1.45 to $1.65 per ​share was also lower than analysts’ $1.68 view. First quarter revenue rose 6% to $1.07 billion, in line with expectations.

Analyst, Retail View On AKAM

Craig-Hallum upgraded the stock to ‘Buy’ from ‘Hold,’ with a $190 price target, while at least 10 brokerages raised their price targets on the stock, according to the Fly.

Piper Sandler, which raised its price target to $156 from $114, said the AI deal would take a significant increase in capital expenditures, but would result in solid multi-year returns. The analyst forecast growth in 2027 and beyond to be greater than 10% that bulls have been playing for.

Currently, 14 out of 25 analysts rate the stock ‘Buy’ or higher, nine rate it ‘Hold’, and two rate it ‘Sell’ or lower, per Koyfin. Their average price target of $143.76 is 3% below the stock’s close. 

On Stocktwits, the retail sentiment for AKAM has remained ‘extremely bullish’ since late Thursday. The watcher count for the ticker surged nearly 4% last week.

Akamai shares are up 70% year to date, and the year is already shaping up to be the stock’s best since 2006.

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