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CAMBRIDGE, Mass. - Akamai Technologies, Inc. (NASDAQ: AKAM), a $12.25 billion market cap leader in cybersecurity and cloud computing solutions with annual revenue of $3.99 billion, today announced the launch of Akamai Cloud Accelerated Compute Instances. According to InvestingPro data, the company maintains strong profitability with an EBITDA of $1.12 billion in the last twelve months. This new category of cloud-based compute is powered by video processing units (VPUs) from NETINT Technologies, marking Akamai as the first and only cloud provider to integrate VPUs into its offerings.
The Akamai Accelerated Compute Instances utilize NETINT’s Quadra T1U VPUs, which are specifically designed for efficient media transcoding. These VPUs support encoding resolutions up to 8Kp60 and are capable of encoding 32 live streams at 1080p30 broadcast quality. The integration of VPUs aims to address the growing demand for high-quality video streaming services by providing a more cost-effective and energy-efficient solution compared to traditional CPU-only platforms.
Jon Alexander, Vice President of Product Management at Akamai, highlighted the significance of this launch, stating, "By bringing traditionally hardware-confined power to the cloud, we’re removing barriers that have held businesses back. Companies can now cut costs, scale seamlessly, and deliver better streaming experiences.”
The VPUs allow for offloading compute-intensive video processing tasks, freeing up CPU resources for other applications. The VPU architecture delivers up to 20 times the throughput of CPU-only solutions, potentially reducing operational costs significantly.
Randal Horne, Chief Revenue Officer at NETINT, added, "VPUs are the ultimate cheat code for video streaming profitability. NETINT is proud to be the VPU engine inside Akamai Accelerated Compute Instances, bringing up to 20 times the throughput at a tenth of the cost compared with traditional industry platforms." This focus on efficiency aligns with Akamai’s financial performance, as InvestingPro analysis shows the company maintaining steady revenue growth of 4.7% and receiving a "FAIR" overall financial health score.
Akamai’s move to offer VPUs in the cloud is part of its strategy to become the preferred cloud provider for media companies. The company’s media services are already trusted by the top 10 video streaming services and include a comprehensive suite of solutions for digital content management.
Akamai will showcase its new cloud-based media delivery, computing, and security capabilities at the upcoming 2025 NAB Show in Las Vegas, from April 6 to April 9. Attendees can visit the Akamai Lounge for more information on their offerings.
This announcement is based on a press release statement from Akamai Technologies, Inc. For investors seeking deeper insights, InvestingPro offers comprehensive analysis including 6 additional ProTips and a detailed Pro Research Report, part of their coverage of over 1,400 US stocks. Current analysis suggests Akamai is trading below its Fair Value, presenting a potential opportunity for value investors.
In other recent news, Akamai Technologies has been the subject of several noteworthy developments. Oppenheimer has assumed coverage of Akamai with an Outperform rating and set a new price target of $100, highlighting the company’s potential for growth in its Security and Compute portfolio. Meanwhile, Guggenheim has maintained its Buy rating for Akamai, with a price target of $133, emphasizing the company’s expansion into Security and Cloud solutions as key growth drivers. However, S&P Global Ratings has revised Akamai’s outlook to negative from stable due to increased leverage, noting that the company’s leverage rose to 1.8x, surpassing the 1.5x threshold for its ’BBB+’ rating.
Additionally, Akamai’s CEO, F. Thomson Leighton, purchased approximately $3 million worth of the company’s stock, which is often seen as a strong vote of confidence in the firm’s prospects. This insider transaction was disclosed in an SEC filing, further indicating transparency in the company’s operations. Despite the challenges posed by rising leverage, Akamai continues to focus on its strategic initiatives in the Security and Cloud segments, which are expected to contribute to long-term business growth. Investors are closely monitoring these developments as Akamai navigates its financial and strategic landscape.
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