May. 13 at 6:58 PM
Akamai Technologies
is transitioning into a “credible AI infrastructure platform,” according to Bank of America.
The bank upgraded the stock to buy from neutral and hiked its price target to
$175. That implies a 17% gain from Tuesday’s close. Analyst Tal Liani wrote in a Wednesday note that the growth in the company’s cloud business is encouraging.
“Cloud Infrastructure Services (CIS) is inflecting, growing 40% YoY, with momentum supported by AI workloads and edge inference use cases. Management is winning on latency and distributed architecture versus centralized cloud peers,” Liani wrote. He added Akamai’s
$1.8 billion infrastructure deal with an AI company will create more recurring revenue.
And while capital expenditures from the company are a hit to free cash flow, Liani sees earnings accelerating over the next two years. Shares were up more than 6% in late morning trading Wednesday.
$AKAM