Piper Sandler’s Top Technical Stock Picks: 20 Best Stocks

15. Akamai Technologies, Inc. (NASDAQ:AKAM)

Number of Hedge Fund Holders In Q2 2024: 31

Akamai Technologies, Inc. (NASDAQ:AKAM) is a cloud computing company that caters to the needs of the SaaS industry. It allows SaaS firms to run security and analytics and deliver media and content. Akamai Technologies, Inc. (NASDAQ:AKAM)’s shares are down 13% year to date as they are yet to recover from a 16% drop in February. Its business is divided into three segments, Security, Delivery, and Compute which account for 50%, 35%, and 15% of the revenue as of H1 2024. Within these, Delivery’s revenue dropped 12% annually in H1 on the back of a weaker SaaS industry. Consequently, Akamai Technologies, Inc. (NASDAQ:AKAM)’s Security business has to perform in the future, and the growth in AI and the broader software computing industry could create tailwinds for its Compute business. The firm made a $450 million acquisition to beef up its Security division earlier this year, and it could grow its top line revenue in the future.

Akamai Technologies, Inc. (NASDAQ:AKAM)’s management commented on its Delivery business during the Q2 2024 earnings call:

“In Q2, delivery accounted for one third of our revenue, or $329 million. This is quite a change from five years ago when delivery accounted for two thirds of Akamai revenue. The diversification of our revenue across new markets through continuous innovation has long been a core part of Akamai’s strategy for long-term profitable revenue growth. A little more than a decade ago, we expanded our business into security with the creation of web app firewall as a cloud service. We did this to meet what we recognized as a growing customer need in a way that was complementary to what Akamai was already doing for customers with delivery. The opportunity was clear to us because we listened to our customers. We created what has proved to be a very successful cloud service for web app firewall.”