old tech giant is a terrific buy
Jim Cramer endorsed Akamai Technologies (AKAM) on CNBC's Mad Money, calling it a terrific stock. Akamai, known for speeding up websites, is shifting towards higher-margin cybersecurity and cloud services. The company reported $1.1 billion in Q2 revenue, up 5%, with security revenue up 10% and cloud infrastructure revenue up 39%. Akamai has secured $2.8 billion in multi-year cloud deals, including a $1.8 billion contract with Anthropic. Shares rose about 12% post-earnings, and the stock is up 30%
How this was made
The 30-second read
Why it matters
The Q2 earnings and new AI contracts provide fresh growth catalysts, likely influencing trader positioning.
Market read
Akamai's earnings beat and AI contract wins could drive short‑term price gains and affect related tech stocks.
What to watch
Execution risk on converting $2.8B contracts to cash flow and potential competition from larger cloud providers.
Background
Akamai, a long‑standing CDN provider, is shifting toward higher‑margin security and AI cloud services.
Ticker impact
Akamai Technologies reported Q2 results with $1.1B revenue, $2.8B cloud contracts and a 12% share jump.
Potential further price appreciation if cloud contracts convert to revenue.
New earnings numbers and multi‑year AI contracts provide fresh growth visibility, outweighing higher capex.
Market effects
Highlights accelerating AI spend in the cybersecurity and edge‑cloud space.
Positive for US tech sector, especially cloud‑infrastructure peers.
Reinforces broader AI‑driven growth narrative across global markets.
Counterpoint
High capex and margin pressure could limit near‑term earnings, risking a pull‑back.
Key entities
- CEOTom Leighton
CEO since 2013, steering Akamai toward security and AI.
- PartnerAnthropic
Recipient of a $1.8B, seven‑year AI contract with Akamai.
