2. Akamai Technologies, Inc. (NASDAQ:AKAM)
Short Interest as % of Shares Outstanding: 6.89%
Number of Hedge Fund Holders: 31
Akamai Technologies, Inc. (NASDAQ:AKAM) is an American technology company that specializes in content delivery networks (CDNs), cybersecurity, cloud services, and DDoS mitigation solutions.
The company operates a globally distributed server network that enhances digital content delivery for websites and web services. By using its sophisticated edge computing platform, it provides fast, secure, and reliable access to online resources, which helps businesses scale their operations and optimize user experiences.
Akamai (NASDAQ:AKAM) is revolutionizing 5G security through its Carrier Mobile solutions. It helps businesses secure their networks in a mobile-first world. While 5G is revolutionizing the world, it also brings security challenges, including a rise in mobile phishing attacks and the vulnerability of IoT devices, which often lack strong security features.
The company addresses these challenges by offering enterprises secure private network slices, which allow businesses to shield their mobile and IoT devices from risks associated with public mobile networks and minimize vulnerabilities.
Akamai (NASDAQ:AKAM) security solutions help enterprises maintain control over their networks, which provide comprehensive protection for both employees and IoT devices. This empowers businesses to embrace 5G while mitigating the associated risks.
While Akamai (NASDAQ:AKAM) is a 5G stock with some of the highest short interest rates in the 5G segment, analysts seem to disagree with the sentiment. The company’s delivery services have been facing challenges due to macroeconomic conditions and geopolitical factors, which have impacted its growth in recent quarters. However, its reinvestments in growth areas offset those concerns.
On August 29, TipRanks reported that Tigress Financial analyst, Ivan Feinseth reaffirmed his Buy rating for the company with a price target of $140. He highlighted that the company’s successful shift towards becoming a major provider of cloud-based security services is helping mitigate the decline in its content delivery segment.
Feinseth noted that the company’s integration of Edge Compute solutions is driving growth, supported by increased demand for cloud, Edge, and distributed computing. He also mentioned Akamai’s (NASDAQ:AKAM) strong financial position, with healthy cash flow and a solid balance sheet, which allowed the company to invest in growth and pursue share repurchases.
In the second quarter, 31 hedge funds had stakes worth $361.203 million in Akamai (NASDAQ:AKAM). As of June 30, Alyeska Investment Group owns 1.13 million of the company shares worth $102.1 million and is the most prominent shareholder of the company. The most prominent short positions in the company have been held by Citadel Investment Group and PEAK6 Capital Management, worth $35.9 million and $27.9 million as of Q2, respectively.
Diamond Hill Long-Short Fund stated the following regarding Akamai Technologies, Inc. (NASDAQ:AKAM) in its fourth quarter 2023 investor letter:
“Akamai Technologies, Inc. (NASDAQ:AKAM) is a legacy content delivery network (CDN) solutions provider which management has recently pivoted to enterprise and network security as well as distributed cloud computing. However, these markets are intensely competitive, and Akamai has yet to prove it can differentiate itself from cloud hyperscalers and best-of-breed security companies.”
