Akamai Technologies Inc AKAM

Akamai Offers Appealing Security and Compute at the Network's Edge, but Neocloud Shift Adds Risk

Akamai’s original business, content delivery networks, is in slow decline as data transmission prices have decreased faster than data volumes have increased. We still believe that content delivery will remain profitable, but we increasingly view the delivery network as an accessory to the security business. The continued focus on security offerings seems prudent given the continuing headwinds in content delivery. Despite our favorable view on the security business, we believe the market has an overly optimistic assessment of Akamai’s compute opportunity with Anthropic, which we see as largely commoditized.