Cloud and cybersecurity services provider Akamai Technologies (AKAM) announced that it has acquired thousands of Blackwell GPUs from NVIDIA Corporation (NVDA) to strengthen its distributed cloud infrastructure. The GPUs will be used for R&D, fine-tuning, and performing post-training optimization of artificial intelligence (AI) inference workloads, thereby optimizing compute resources across the company’s global network.
Akamai has been expanding its AI inference capabilities. In October 2025, the company launched the Akamai Inference Cloud, which expands inference from core data centers to the edge of the internet.
Against this backdrop, should you buy, sell, or hold Akamai’s stock?
Headquartered in Cambridge, Massachusetts, Akamai operates a vast global network that helps companies deliver websites, apps, software, and digital content smoothly and securely over the internet. It’s a distributed platform that spreads traffic across many locations, so pages and videos load quickly, even under heavy use.
Also, the firm offers protection for online services, guarding against threats and keeping user data safer. Akamai supports online shopping, video streaming, gaming, and corporate IT systems worldwide. Akamai has a market capitalization of $14.79 billion.
Strong demand for faster, safer online experiences, especially for streaming, gaming, and enterprise-grade security, has boosted its outlook and kept sentiment positive. Akamai is a key player in critical internet infrastructure areas such as cybersecurity, content delivery, and cloud-edge services.
Over the past 52 weeks, the stock has gained 24.76%, while it has been up 17.5% year-to-date (YTD). Just for comparison, the broader S&P 500 Index ($SPX) has gained 19.08% over the past 52 weeks and increased marginally YTD, thereby underperforming the stock. Akamai’s shares had reached a 52-week high of $113.50 on Feb. 13, but are down 10.26% from that level.
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On a forward-adjusted basis, Akamai’s stock is trading at a price-to-earnings ratio of 14.85x, lower than the industry average of 21.63x.
On Feb. 19, Akamai reported better-than-expected fourth-quarter results for fiscal 2025. The company’s revenue increased 7.4% year-over-year (YOY) to $1.09 billion, exceeding the $1.08 billion Street analysts expected. Its security revenue grew 10.8% from the prior-year period to $592.36 million. Cloud computing revenue grew the fastest out of all segments, growing by 14.3% YOY to $191.44 million.
Akamai CEO Dr. Tom Leighton highlighted the company’s 36% YOY revenue growth across its Guardicore Segmentation and API Security products, and a 45% top line growth in Cloud Infrastructure Services (CIS).
However, Akamai’s non-GAAP operating margin remained flat YOY at 29%. The company’s profitability (GAAP-based) was affected by a $55 million restructuring charge recognized during the quarter, primarily severance costs from workforce reductions and impairments of certain intangible assets. Non-GAAP EPS was $1.84, up 10.8% YOY and higher than the $1.75 that Street analysts had expected.
Akamai expects to continue seeing strong CIS demand, driven by customer adoption of its new Inference Cloud and the broader growth of AI applications and agents. The company expects to incur higher capex this year, about 23%-26% of its revenue. Its annual non-GAAP operating margin is also expected to decline to 26%-28%. This subdued guidance is most likely the reason the stock dropped 14.1% intraday on Feb. 20.
Wall Street analysts have a tepid view about Akamai’s bottom line trajectory. For the current quarter, its EPS is expected to drop by 9.1% YOY to $1.00. For fiscal 2026, EPS is expected to decline by 3.6% to $4.25. On the other hand, for fiscal 2027, the company’s EPS is projected to increase by 12.7% annually to $4.79.
In February, following the company’s fourth-quarter earnings release, analysts at Piper Sandler maintained a “Neutral” rating on Akamai’s stock but raised the price target from $89 to $97, noting that the quarterly results reflected the largest upside in three years. However, analysts are also concerned about investors’ worries about the firm’s rising spending on additional computing and infrastructure services, given the lower revenue-to-capex ratio.
KeyBanc analysts maintained a bullish “Overweight” rating on Akamai after the results and raised the price target from $115 to $120, citing the company’s increased capex guidance as a sign of future GPU revenue growth. While some potential spending is due to higher memory costs, the majority is driven by GPU demand. Evercore ISI analysts also kept an “Outperform” rating on Akamai shares and raised the price target from $105 to $115. Yet, analysts have warned that future investments will weigh on margins this year.
Akamai has come under the spotlight on Wall Street, with analysts awarding it a consensus “Moderate Buy” rating overall. Of the 22 analysts rating the stock, 10 analysts have rated it a “Strong Buy,” one analyst suggests a “Moderate Buy,” while nine analysts are playing it safe with a “Hold” rating, and two gave a “Strong Sell” rating. The consensus price target of $108.10 represents a 5% upside from current levels. The Street-high price target of $134 indicates a 30.1% upside.
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All signs point to Akamai moving toward a capital-intensive transformation to become an intensely AI-integrated platform, and the purchase of NVIDIA Blackwell GPUs aligns with this vision. Despite fears of margin pressure, the gains might be too big to ignore. Therefore, as analysts remain positive about Akamai’s prospects, the stock might be a buy now.
On the date of publication, Anushka Dutta 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. This article was originally published on Barchart.com
