Akamai Technologies, Inc. (AKAM): A Bull Case Theory

We came across a bullish thesis on Akamai Technologies, Inc. on FatAlpha’s Substack. In this article, we will summarize the bulls’ thesis on AKAM. Akamai Technologies, Inc.'s share was trading at $102.10 as of January 28th. AKAM’s trailing and forward P/E were 29.94 and 13.89 respectively according to Yahoo Finance.

Akamai Technologies, Inc. (AKAM) is a global infrastructure software company that has undergone a multi-year transformation from a pure content delivery network (CDN) provider into a broader distributed cloud, cybersecurity, and edge computing platform. While content delivery once accounted for roughly 85% of revenues in 2014, cybersecurity has now emerged as the company’s primary growth engine, complemented by an expanding cloud computing offering. Akamai operates one of the world’s most distributed networks, with thousands of edge locations across more than 130 countries, allowing enterprises to deliver, secure, and run applications close to end users with low latency and high reliability.

The content delivery segment remains under pressure, with revenues expected to be flat to down modestly as competition intensifies and pricing compresses. However, this headwind is increasingly offset by strength in security and cloud. Akamai’s security business, which includes DDoS protection, firewalls, API security, bot mitigation, and zero-trust solutions, is expected to grow around 10%, reflecting the critical and non-discretionary nature of cybersecurity spending. The cloud computing segment is smaller but faster growing, with cloud infrastructure services annual recurring revenue guided to grow 40–45% by year-end, supporting overall segment growth just under 15%.

From a valuation perspective, Akamai trades at a relatively modest forward P/E of roughly 13x and EV/EBITDA of around 9x, positioning it as one of the cheaper plays among peers exposed to security and cloud. The company has also been an aggressive buyer of its own shares, reducing share count materially over the past decade, with significant authorization remaining. While elevated stock-based compensation remains a concern and dampens true economic margins, Akamai’s essential products, improving mix toward higher-growth segments, and reasonable valuation create a cautiously bullish risk-reward profile if management’s growth and margin targets are achieved.

Previously, we covered a bullish thesis on Cloudflare, Inc. (NET) by Oliver | MMMT Wealth in April 2025, which highlighted the company’s network effects, rapid revenue growth, expanding platform across security and developer services, and an approaching profitability inflection point. NET’s stock price has appreciated by approximately 73.09% since our coverage due to strong top-line growth and improving operational leverage. FatAlpha shares a similar view on infrastructure software but emphasizes valuation discipline, mature cash flows, and transformation-led upside at Akamai Technologies, Inc. (AKAM).

Akamai Technologies, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held AKAM at the end of the third quarter which was 42 in the previous quarter. While we acknowledge the risk and potential of AKAM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AKAM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.