D.A. Davidson reiterated its Buy rating on Akamai Technologies (NASDAQ: AKAM) and maintained a $125.00 price target following the company’s fourth-quarter report.
Akamai delivered quarterly results that topped expectations on both the top and bottom lines. Its Cloud and Infrastructure Services division showed notable momentum, accelerating to 44% year-over-year growth on a constant-currency basis. That pace improved from the prior quarter’s 39% growth and sat toward the upper end of the company’s 40% to 45% guidance band.
Management set a forward-looking target for the Cloud and Infrastructure Services segment to accelerate further, guiding to 45% to 50% year-over-year growth in 2026. The company also disclosed a four-year agreement with a major U.S. technology company with a total contract value of $200 million; the vast majority of expected spending under that deal is anticipated to be for AI inference workloads.
Despite the revenue strength and the sizable contract, Akamai’s stock fell roughly 8% in after-hours trading when the company’s 2026 capital expenditure and operating margin guidance came in below some market expectations. The share price dropped to $99.02 from a prior close of $109.31. Over the past six months the stock remains up 44%.
According to InvestingPro analysis referenced in company commentary, the shares appear undervalued versus a Fair Value assessment at current levels, a view that suggests the after-hours selloff could present an entry opportunity for some investors. D.A. Davidson said it would act as a buyer on any such weakness.
Available InvestingPro data indicated Akamai retains a "GOOD" financial health score, with liquid assets exceeding short-term obligations. Investors seeking more detailed company metrics and modeling were pointed to the firm’s Pro Research Report, one of more than 1,400 reports intended to convert complex data into actionable research.
Other broker-dealer actions followed the quarterly release. RBC Capital raised its price target from $90 to $100 while keeping a Sector Perform rating. KeyBanc lifted its target to $120 and cited Akamai’s capex guidance as a constructive signal for future GPU-related revenue. The company’s 2026 capital expenditure was projected to reach 24.5% of revenue, which the commentary described as the highest level in recent years.
Morgan Stanley upgraded Akamai from Underweight to Overweight and increased its price target to $115, characterizing the company as approaching an important inflection in its business model evolution. Scotiabank raised its target to $105 and highlighted Akamai’s prospects in AI infrastructure, referencing the company’s partnership with NVIDIA and the introduction of its Inference Cloud.
In addition to commercial and capital plans, Akamai announced a strategic collaboration with Visa intended to strengthen security for AI-powered commerce. The initiative will integrate Visa’s Trusted Agent Protocol with Akamai’s security technologies to address security challenges arising as AI agents participate more actively in consumer transactions.
Key takeaways:
- Akamai beat fourth-quarter revenue and earnings expectations; Cloud and Infrastructure Services growth accelerated to 44% year-over-year.
- Company guided for further acceleration to 45%–50% year-over-year growth in 2026 and disclosed a $200 million, four-year contract focused largely on AI inference.
- Shares dipped after-hours due to 2026 capex and operating margin guidance that fell short of some expectations, even as multiple analysts raised price targets or upgraded ratings.
Market and sector impacts: Cloud services and AI infrastructure sectors are directly implicated by the revenue and contract disclosures. GPU-related revenue expectations and elevated capex guidance also touch the broader semiconductors and data-center investment cycle narratives. Cybersecurity and payments sectors are affected by the partnership focused on securing AI-driven commerce.