Akamai Technologies, a cloud provider and cybersecurity firm, has seen its shares rise as much as 16.4% following the announcement of an $11.6 billion agreement with Anthropic, an artificial intelligence platform, to secure additional computing capacity over the next seven years. The stock price settled around an 8% gain, reflecting strong market enthusiasm.
This deal focuses on central processing units (CPUs), which are deemed more suitable for the coordinated computing tasks associated with advanced AI applications. Analysts from Oppenheimer estimate that the deal will provide approximately 77 megawatts of computing power, although Akamai has not disclosed specific power requirements.
To meet the contract's demands, Akamai plans to invest $5.5 billion in capital expenditures. The company has already secured $14.6 billion in cloud commitments this year, with analysts forecasting robust profit margins, estimating an EBIT margin of around 30% at full revenue run-rate.
Morgan Stanley has raised its revenue growth estimates for Akamai from 12.5% to approximately 16% for 2027, based on the anticipated financial impact of the deal.
Piper Sandler views this agreement as a transformative moment for Akamai, shifting its profile from a 'value' asset to a 'hypergrowth' asset, with expectations that its cloud infrastructure services will surpass its security business by late 2028.
Other analysts, including DA Davidson and Evercore ISI, have also expressed optimism about Akamai's future growth, highlighting the potential for further partnerships and revenue acceleration in the AI sector