Overview
RBC Capital raised its price target on Akamai Technologies to $100 from $90 while maintaining a Sector Perform rating on Thursday. The firm noted that Akamai posted a solid fourth-quarter performance, driven by continued momentum in cloud computing and AI inference services.
Market reaction and recent performance
Shares moved lower in after-hours trading, falling to $98.31 from a previous close of $109.31, a decline of roughly 10% following the announcement. Prior to the quarterly report, the stock had gained approximately 29% year-to-date and about 44% over the previous six months.
What RBC highlighted
RBC pointed to strength in Akamai’s cloud computing and AI inference offerings and cited solid growth in the company’s Guardicore and API Security products. Those growth areas were noted as offsets to broader execution challenges, with RBC saying delivery headwinds remain but are showing improvement.
Guidance and cost pressures
Management’s profitability guidance for the first quarter and for fiscal 2026 as a whole came in below consensus, according to the company’s disclosures. Akamai also plans to invest roughly $250 million in cloud computing capacity as it scales those services.
At the same time, the company faces increased operating costs. Akamai expects about $200 million in elevated memory chip costs tied to AI-related hardware inflation. The firm also cited higher co-location costs and rising depreciation expenses as additional near-term headwinds.
Other analyst moves and strategic developments
Several other firms have adjusted their views on Akamai in recent coverage. KeyBanc raised its price target to $120 and characterized the company’s capital-expenditure guidance as an indicator of potential future GPU-driven revenue growth. Akamai’s capital spending for 2026 is expected to reach 24.5% of revenue, a level described as the highest in recent years.
Morgan Stanley upgraded the stock to Overweight and increased its price target to $115, pointing to what it called an important inflection point in Akamai’s business-model evolution that could support improved top-line and EPS growth. Scotiabank raised its target to $105 and highlighted Akamai’s positioning in AI infrastructure, referencing the company’s partnership with NVIDIA and the launch of its Inference Cloud.
KeyBanc is also noted as having upgraded Akamai to Overweight, underlining potential revenue upside from the company’s compute business.
Strategic partnerships
On the strategic front, Akamai announced a collaboration with Visa intended to bolster security for AI-powered commerce. The partnership will integrate Visa’s Trusted Agent Protocol with Akamai’s edge-based security technologies to address the challenges merchants may face from autonomous AI agents in commerce.
Bottom line
Analysts emphasize that Akamai’s emerging compute and AI-inference businesses are driving momentum, while guidance and several cost categories - notably AI-related memory chip inflation, co-location expenses and depreciation - represent meaningful near-term pressures on profitability. Investor reactions have been mixed, reflected in the after-hours price move following the results and the string of recent analyst target increases and upgrades.
Note: This article presents reported analyst actions, company guidance and noted cost pressures as disclosed. It does not add additional forecasts or commentary beyond those statements.