Akamai Technologies, Inc. (AKAM): A Bull Case Theory 

We came across a bullish thesis on Akamai Technologies, Inc. on Valueinvestorsclub.com by Beantown Stonks. In this article, we will summarize the bulls’ thesis on AKAM. Akamai Technologies, Inc.’s share was trading at $87.71 as of December 1st. AKAM’s trailing and forward P/E were 26.25 and 12.18 respectively according to Yahoo Finance.

Akamai Technologies (AKAM) presents a compelling investment opportunity, driven by secular growth tailwinds in cybersecurity, cloud computing, and edge applications, alongside strong cash generation and a depressed valuation relative to peers. Historically known as a content delivery network (CDN), Akamai’s Delivery segment has declined from 88% of revenue a decade ago to 33% today, primarily due to competition and some customers internalizing CDN capabilities.

However, this decline is stabilizing as smaller competitors exit and pricing pressure eases, while overall internet traffic continues to grow. Akamai has successfully expanded into Security and Compute, now contributing 51% and 16% of revenue respectively, with high-growth areas including API security and microsegmentation growing over 30% annually. Its Compute segment, bolstered by the Linode acquisition and edge infrastructure, is positioned to benefit from AI-driven applications, especially inference workloads where latency and security are critical.

Akamai operates with high incremental margins, particularly in its software-driven Security segment, and management’s disciplined capital allocation—focused on M&A, infrastructure investment, and share repurchases—supports strong free cash flow. With Capex peaking during infrastructure upgrades, FCF generation is set to accelerate, providing flexibility for both growth initiatives and shareholder returns. Revenue is expected to grow at ~7.5% CAGR through FY28, with Security and Compute driving margin expansion and roughly $800 million in free cash flow.

Valuation is attractive, with AKAM trading at 3.4x EV/Sales versus a peer median of 4.6x, and a Rule-of-40 score indicating above-median growth and profitability potential. As investor perception shifts from legacy CDN to a cybersecurity and cloud leader, contract wins, accelerating growth, and FCF-driven capital returns position AKAM for significant upside, with a potential 40–50% share price appreciation from current levels.

Previously we covered a bullish thesis on Cloudflare, Inc. (NET) by Oliver | MMMT Wealth in April 2025, which highlighted the company’s network effects, strong revenue and EBITDA growth above 20%, and an approaching profitability inflection in 2025. The company’s stock price has appreciated approximately by 84.62% since our coverage. The thesis still stands as Cloudflare scales across security and performance. Beantown Stonks shares a similar but emphasizes Akamai Technologies’ focus on stabilizing Delivery while driving growth in Security and Compute.

Akamai Technologies, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held AKAM at the end of the second quarter which was 40 in the previous quarter. While we acknowledge the risk and potential of AKAM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AKAM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.