DA Davidson reiterates Buy rating on Akamai Technologies stock with $115 target

Investing.com - DA Davidson has reiterated its Buy rating on Akamai Technologies (NASDAQ:AKAM) with a price target of $115.00, citing strong momentum in the company’s compute business. The target represents significant upside from the current price of $90.51, with InvestingPro data suggesting the stock is currently undervalued based on Fair Value estimates.

The firm noted that Akamai’s Compute business dominated recent conversations with management, who continue to express bullish sentiment about this segment’s prospects. This optimism appears to be reflected in the market, with the stock showing a remarkable 24.16% return over the past week.

DA Davidson indicated that acceleration in Connected Intelligence Security (CIS) Annual Recurring Revenue (ARR) growth beyond the company’s calendar year 2025 guidance of 40-45% year-over-year at constant currency appears possible, driven by potential CIS ARR from AI inferencing use cases currently being discussed with customers.

The research firm expects Akamai’s overall top-line growth to accelerate into the mid-single to high-single digit range over the next one to two years, supported by CIS momentum, steady high-single digit organic Security growth, and improving trends in the Delivery business.

Akamai’s growth outlook is underpinned by multiple factors including the company’s expanding presence in AI-related services and the stabilization of its traditional content delivery network business.

In other recent news, Akamai Technologies reported robust third-quarter earnings for 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $1.86, compared to the forecasted $1.64, marking a 13.41% positive surprise. Akamai’s revenue also exceeded projections, reaching $1.06 billion against the anticipated $1.04 billion. These results highlight the company’s strong financial performance and have garnered positive attention from investors. Additionally, the earnings announcement was followed by a slight increase in Akamai’s stock in aftermarket trading. The company’s performance has sparked discussions among analysts regarding its future prospects. While some firms have provided their insights, the focus remains on Akamai’s ability to maintain its growth trajectory. These recent developments emphasize the company’s solid standing in the market.

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