Akamai: Heavy AI Spending, But The Demand Is Already Contracted

Akamai Technologies is pivoting from declining content delivery to growth in cloud infrastructure and security, underpinned by a $1.8B, seven-year cloud contract. Cloud Infrastructure Services are expected to grow at least 50% in 2026, driving double-digit total revenue growth by 2027, despite heavy upfront capex. AKAM’s valuation at 18.8x 2026 non-GAAP earnings appears reasonable, with committed demand reducing risk versus speculative capacity investments. I rate AKAM a cautious Buy, citing improved revenue visibility, maturing cloud economics, and dual AI tailwinds in infrastructure and security.

Akamai Technologies ( AKAM ) is becoming less dependent on its declining content delivery business as security and cloud infrastructure take a larger role. The biggest development was a seven-year, $1.8 billion cloud infrastructure commitment from a leading frontier-model