Akamai offered strong guidance, and management seems to be genuinely confident in long-term future prospects. Akamai also has a strong history of consistently improving revenue and earnings on an annual basis. The only potential negative here is increased investments, which could slightly impact the bottom line in the near future.
Akamai Technologies, Inc. (NASDAQ:AKAM)’s long-term potential
Do you plan on shopping online at some point? Will you surf the Internet today, tomorrow, or next week? Will you listen to online music in the future? Will you watch streaming videos online? If you answered yes to any of these questions, then chances are good that Akamai has already played a role in your life for a significant amount of time.
Akamai’s slightly high valuation makes it a risky play due to uncertain macroeconomic conditions. Despite the company’s importance, its stock hasn’t held up well in difficult stock market environments. Experienced investors and traders tend to ride the technology wave when times are good, but they abandon ship when the market heads south.
Over the long haul, if Akamai fails, then either it’s the end of the Internet or the end of the world. If neither of those scenarios seem likely to you, then Akamai should be a good long-term play. However, due to an uncertain macroeconomic environment, you should strongly consider entering this position slowly.
Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Rackspace Hosting (NYSE:RAX). Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article A Top-Notch Internet Growth Play originally appeared on Fool.com is written by Dan Moskowitz.
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