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Investing.com - Piper Sandler reduced its price target on Akamai Technologies (NASDAQ:AKAM) to $83.00 from $88.00 on Friday, while maintaining a Neutral rating on the stock. According to InvestingPro data, the company appears undervalued based on its Fair Value analysis, with the stock down nearly 22% year-to-date despite maintaining strong financial health metrics.
The adjustment follows what Piper Sandler described as a "reset" of Akamai shares over recent weeks, with the stock moving slightly higher in after-hours trading after the company beat expectations and raised its full-year guidance. Management has been actively supporting shareholder value through aggressive share buybacks, which InvestingPro analysis identifies as a key strength, along with the company’s consistently profitable operations.
The research firm noted that while Akamai raised its outlook, the improvement was primarily attributed to favorable foreign exchange conditions, TikTok inclusion, and Content Delivery Network (CDN) upside, which offset underperformance in the Compute segment and in-line results from Security.
Piper Sandler pointed to the "many moving parts" within Akamai’s business, suggesting the company’s ongoing transition will take time to complete, with the potential for growth acceleration into mid-single digits or higher territory over the next few years if successful.
The lower price target specifically reflects reduced free cash flow estimates, with Piper Sandler expecting Akamai shares to remain range-bound during this transitional period.
In other recent news, Akamai Technologies reported robust financial results for the second quarter of 2025, exceeding analysts’ expectations. The company achieved an earnings per share of $1.73, surpassing the forecasted $1.55, marking an 11.61% surprise. Revenue also outperformed projections, reaching $1.043 billion compared to the anticipated $1.02 billion. These positive earnings results led to a rise in investor optimism. Raymond (NSE:RYMD) James maintained its Outperform rating on Akamai but adjusted the stock’s price target to $84 from $110 following these results. The adjustment was made despite the company’s strong quarterly performance, attributed to a continued rebound in its delivery business as traffic growth begins to normalize. These developments highlight Akamai’s financial health and market performance as of late.
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