Bank of America upgraded Akamai Technologies to Buy, arguing the company’s transition from a legacy content-delivery network provider into an AI infrastructure platform is beginning to gain traction with investors and enterprise customers alike.
The brokerage raised its price objective to $175 from $130, implying roughly 18% upside from Tuesday’s close of $149.56. Analysts led by Tal Liani cited accelerating demand for distributed AI computing and edge inference workloads as key drivers behind the rerating.
A central pillar of the bullish thesis is Akamai’s Cloud Infrastructure Services business, which BofA said is growing about 40% year-over-year as enterprises increasingly seek lower-latency AI deployment outside centralized hyperscale cloud environments. The analysts pointed to a newly signed $1.8 billion, seven-year infrastructure agreement as evidence that demand for distributed AI capacity is becoming commercial reality rather than speculative enthusiasm.
BofA expects the deal to contribute $20 million to $25 million in quarterly revenue beginning in the fourth quarter, supporting a broader shift toward recurring, capacity-based infrastructure sales. That momentum is helping offset continued declines in Akamai’s traditional delivery business, where revenue fell 7% from a year earlier.
The firm now projects Akamai revenue growth will accelerate to 11.4% in 2027 from 8.2% in 2026, while earnings per share are forecast to climb to $9.03 by 2028 from an estimated $6.93 in 2026.
The AI expansion comes at a cost. BofA estimates capital expenditures will rise to as much as $825 million over the next 12 months as Akamai builds out infrastructure capacity, pressuring near-term free cash flow and margins. Free cash flow is projected to decline nearly 48% in 2026 before rebounding in later years.
Even so, analysts argued the market is underestimating Akamai’s ability to evolve beyond content delivery into a hybrid edge-and-core compute platform competing with larger cloud providers. The brokerage lifted its valuation multiple to 22.5 times projected 2027 earnings, up from 17 times previously, though still below pure-play cloud computing peers.
