13 Cheap AI Stocks to Buy According to Analysts

4. Akamai Technologies, Inc. (NASDAQ:AKAM)

Number of Hedge Fund Holders: 37

Average Upside Potential: ~26.6%

Forward P/E as of May 12: ~12.7x

Akamai Technologies, Inc. (NASDAQ:AKAM) is engaged in the provision of security, delivery, and cloud computing solutions. The company leverages AI and ML across key areas of its business, primarily in edge computing, cybersecurity, and content delivery. RBC Capital analyst Rishi Jaluria increased the company’s price objective to $80 from $75, keeping a “Sector Perform” rating. Given that the underlying business has been witnessing a shift, the firm is cautious on the near-term outlook. However, it also opines that the risk-reward on the company’s stock remains balanced. The advancement of AI provides numerous opportunities for the company to enhance service offerings and fuel growth. Notably, AI technologies remain in line with Akamai Technologies, Inc. (NASDAQ:AKAM)’s strengths in edge computing and distributed networks, positioning it well to capitalize on the trend.

The higher adoption of AI applications continues to fuel demand for edge computing resources. AI workloads tend to require low-latency processing close to the data source, which is what Akamai Technologies, Inc. (NASDAQ:AKAM)’s edge network offers. With companies implementing AI-driven solutions, the company is expected to see higher utilization of its Compute segment services. As AI becomes more relevant in enterprise applications, Akamai Technologies, Inc. (NASDAQ:AKAM)’s extensive network, as well as its enterprise customer base, offers a healthy foundation for offering AI-as-a-Service or specialized AI-optimized delivery solutions.

Also, AI technologies can be used to optimize the company’s core CDN services. Furthermore, AI can be used to enhance Akamai Technologies, Inc. (NASDAQ:AKAM)’s security offerings. ML algorithms have the ability to improve threat detection, automate response to security incidents, and provide sophisticated analysis of network traffic patterns. This can result in effective and efficient security solutions, fueling growth in the company’s security business.