Will the Launch of Cloud Inference Platform Benefit AKAM Stock?

Akamai Technologies, Inc. AKAM recently announced the launch of a new distributed edge platform, Akamai Cloud Inference. Leveraging its state-of-the-art cloud computing platform, Akamai Cloud, the solution aims to drive faster and more efficient innovation for organizations, harnessing the power of predictive models and large language models (LLMs).

In today’s fast-changing digital landscape, bringing AI (artificial intelligence) data closer to end users and devices remains a significant challenge for traditional cloud models. While large-scale hyperscale data centers handle the heavy lifting of training LLMs, the actionable task of inference requires performance that centralized clouds often fail to provide. Akamai Cloud Inference overcomes this limitation by enabling engineers and developers to run AI applications and data-intensive workloads closer to end users, enhancing performance with up to 3x better throughput while reducing latency up to 2.5x.

What Does AKAM’s Cloud Inference Platform Include?

Akamai Cloud Inference offers a comprehensive set of tools designed to optimize AI inference across various aspects of cloud computing. From versatile compute equipment ranging from classic central processing units for fine-tuned inference to high-performance graphics processing units (GPUs) and application-specific integrated circuit vision processing units, the platform handles a wide spectrum of AI challenges. Integration with NVIDIA Corporation’s NVDA AI Enterprise ecosystem further optimizes its capability, ensuring enhanced performance for AI inference tasks on NVIDIA GPUs.

To complement its powerful computer resources, Akamai provides an advanced data management stack, purpose-built for modern AI workloads. The data management solution includes scalable object storage for managing large and varied datasets, as well as integration with leading vector database providers like Aiven and Milvus to enable retrieval-augmented generation.

Akamai’s containerization capabilities allow for demand-based autoscaling, improved application resilience and hybrid/multi-cloud portability, optimizing performance cost-effectively. By integrating Akamai Cloud's latest Kubernetes orchestration platform with the Akamai App Platform, the Akamai Cloud Inference solution will enable organizations to quickly deploy a flexible, open-source Kubernetes infrastructure, enabling the seamless deployment of AI models for inference.

Moreover, the incorporation of WebAssembly capabilities within the Cloud Inference solution will enable developers to execute inferencing for LLMs directly from serverless apps, allowing customers to execute lightweight code at the edge. By combining these powerful tools, Akamai Cloud Inference creates a robust platform for low-latency AI-powered applications, addressing the increasing demands of businesses that require high-performance experiences.

Does AKAM Stock Stand to Gain From the Launch?

Akamai’s cloud-optimization solutions help organizations improve performance, increase availability and enhance the security of applications and key web assets delivered from data centers to the end user. The company expanded its cloud computing production by introducing Akamai Connected Cloud. This massively scaled edge network comprises more than 4,200 points of presence in more than 130 countries worldwide, providing improved security and greater scalability to help businesses enhance their IT infrastructure.

These advancements are expected to generate incremental demand for Akamai’s solutions, leading to higher revenues. An improved financial performance is likely to propel the stock upward.

AKAM Stock Price Performance

Shares of Akamai have plunged 25.1% over the past year against the industry’s 6.8% growth.

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AKAM’s Zacks Rank and Stocks to Consider

Akamai currently carries a Zacks Rank #4 (Sell). 

A couple of better-ranked stocks in the broader industry have been discussed below.

InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, it delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities.

Arista Networks, Inc. ANET, carrying a Zacks Rank of 2 (Buy) at present, supplies products to a prestigious set of customers, including Fortune 500 global companies in markets such as cloud titans, enterprises, financials and specialty cloud service providers.

Arista delivered a trailing four-quarter average earnings surprise of 12.87%. It has a long-term growth expectation of 14.41%.

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This article originally published on Zacks Investment Research (zacks.com).

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