3. Akamai Technologies Inc. (NASDAQ:AKAM)
Beta: 0.68
Potential Upside: 30%
Number of Hedge Fund Holders: 37
Akamai Technologies Inc. (NASDAQ:AKAM) is a global content delivery network (CDN) and cloud services provider, ensuring fast content delivery while safeguarding against cyber threats. The company’s platform enhances website performance and secures online data.
In its Q4 2024 earnings report released on February 20, Akamai Technologies Inc. (NASDAQ:AKAM) posted revenue of $1.02 billion, reflecting 3% year-over-year growth (adjusted for FX) and aligning with expectations. Segment-wise, security and compute revenue saw a 16% increase, though this was partially offset by an 18% decline in delivery revenue. The company is currently undergoing a multi-year transition from a CDN pioneer to a cybersecurity and cloud computing firm. For the quarter, earnings per share (EPS) stood at $1.66, exceeding consensus estimates by 9%. However, its 2025 guidance came in slightly below expectations, as management cited political challenges faced by its largest customer, which is shifting toward a do-it-yourself (DIY) strategy. This transition is expected to impact revenue growth by 1%-2% over the next few years.
Following the earnings report, Susquehanna analyst Shyam Patil maintained a Positive rating on Akamai Technologies Inc. (NASDAQ:AKAM) but lowered his price target from $110 to $105. While he acknowledged solid Q4 results, he noted that the 2025 outlook appeared soft due to forex headwinds, traffic growth trends, and challenges related to the company’s largest customer. Despite these concerns, he remained optimistic about long-term growth, as management reaffirmed its commitment to achieving its 3-5-year revenue target. Similarly, Oppenheimer analyst Timothy Horan maintained an Outperform rating but reduced his price target from $120 to $116.
