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Akamai Technologies Inc - Stock Quote AKAM

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Morningstar's Akamai Technologies Inc Stock Analysis

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Strength in Security and Compute Will Soon Overshadow Akamai’s Declining CDN

Matthew Dolgin, CFA Equity Analyst

Business Strategy and Outlook

| Matthew Dolgin, CFA |

Facing stagnation in its core content delivery network business as its biggest media customers, such as Netflix, retreated in favor of bringing their CDNs in-house, Akamai has done an excellent job of pivoting to areas with growing demand, offering top-rate service, and making smart acquisitions. The key to Akamai's recent success has been the cybersecurity solutions it now offers. As the rest of its business struggles to produce revenue growth, security solutions have been growing about 25% annually and exceeded $1.3 billion in sales in 2021--nearly 40% of total sales. We think management is focusing on the right things and developing great products, but we think the decline in the legacy CDN business will remain a drag.

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Akamai Technologies Inc's Company Profile

Business Description

Akamai operates a content delivery network, or CDN, which entails locating servers at the edges of networks so its customers, which store content on Akamai servers, can reach their own customers faster, more securely, and with better quality. Akamai has over 325,000 servers distributed over 4,000 points of presence in more than 1,000 cities worldwide. Its customers generally include media companies, which stream video content or make video games available for download, and other enterprises that run interactive or high-traffic websites, such as e-commerce firms and financial institutions. Akamai also has a significant security business, which is integrated with its core web and media businesses to protect its customers from cyber threats.

145 Broadway
Cambridge, MA, 02142
T +1 617 444-3000
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Classic Growth
Employees 8,700

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