On October 1, Jim Cramer discussed Akamai Technologies, Inc. (NASDAQ:AKAM) on Mad Money, highlighting its distributed computing plans and recently announced agreement with Anthropic.
Previously, Cramer called the company “terrific” and mentioned another one of his favorite companies.
Bringing AI Computing Closer to Users
Cramer introduced Akamai Technologies, Inc.’s approach to AI infrastructure, as he said:
Next, there’s Akamai. Now, late last year, they announced a new initiative, Akamai Inference Cloud, which is basically a network of many smaller data centers spread across the globe that help these AI models process data. Management figures that we’re moving from a period of training AI models to a world where we actually use these models at scale, and that requires a lot more infrastructure. Now, in early August, we had Akamai CEO Dr. Tom Leighton on the show for the first time in over five years. I’m going to let him explain what his company’s trying to do.
Cramer’s segment included Leighton’s explanation:
We’re unique in being able to support the AI infrastructure needs from core to edge so that whatever task you have, whatever agent you’re working with or model, if you need to train it, okay, maybe we do that in the core. But the real usage, the day-to-day use is inference where that model is being queried, it’s telling a robot to do something. And that you want to do close to the robot or close to the user so it’s fast and scales and is efficient.
Akamai’s Cloud Infrastructure Services revenue increased 39% year-over-year to approximately $99 million in the second quarter. Security revenue rose 10% to approximately $604 million, helping total revenue grow 5% to approximately $1.1 billion.
Cramer explained why the distributed approach appealed to him, as he said:
Ever since that interview, I’ve been thinking a lot about this Akamai plan. First, it makes total sense. You need distributed data centers, especially as we get into things like this physical AI because this requires a lot of bandwidth and you want the infrastructure as close to the user as possible. That reduces latency… Plus, lately, we’ve seen massive central AI data centers become politically toxic, and it strikes me that Akamai’s idea of building smaller data centers, that could be an easier sale, don’t you think?
You can also read more on Cramer discussing the company’s cloud pivot and robotics win.
Anthropic Adds a Major Commitment
On September 24, Akamai Technologies, Inc. announced an approximately $11.6 billion agreement supporting Anthropic’s central processing unit workloads. The arrangement also provides for a potential additional $9 billion in business, beyond the initial commitment. Cramer discussed the investment required and the size of the contract, as he said:
Now, this is an investment year for Akamai… They got to acquire and build the infrastructure for their inference cloud which will translate into a meaningful earnings hit. But management says there’s a ton of customer interest here and they expect business to turn up in the fourth quarter before really booming in 2027. Hey, by the way, last Thursday, Akamai announced this big win with Anthropic for 11.6 billion contractual commitment over seven years. Clearly, Anthropic needs this additional capacity and they’re willing to pay for it. This works out, by the way, to 1.66 billion per year. Pretty impressive given that it’s more than a third of what Akamai is expected to bring in this year.
The annual figure Cramer mentioned is a simple average. Akamai’s filing specifies separate seven-year project terms beginning on their respective service start dates, with payments subject to delivery and availability requirements. It does not establish equal annual revenue.
It trades at approximately 16.6x forward earnings, below Fastly’s approximately 48x multiple. That offers relative valuation support, although the companies have different growth profiles and business mixes.
Spending Comes Before the Full Revenue Contribution
Akamai Technologies, Inc. estimates approximately $5.5 billion in capital expenditures related to the Anthropic commitment, including an additional approximately $1.7 billion in 2026. The announcement left its 2026 revenue guidance unchanged. The company also issued an Anthropic warrant covering up to approximately 5% of its outstanding common stock, with vesting linked to commitments and further expansion.
Execution remains important because the agreement allows termination for certain breaches and material outages. Existing operations also face pressure. Second-quarter delivery and other cloud applications revenue declined 6%, while adjusted earnings per share fell 8% to $1.59.
Short Interest Stays High as Hedge Fund Ownership Falls
According to Insider Monkey, 62 hedge funds held Akamai in the second quarter, compared with 74 in the prior quarter. Of those funds, Point72 Asset Management was the top shareholder and reduced its position by 22% to nearly 2.6 million shares. Short interest represented 15.37% of the public float, indicating substantial bearish positioning. The quarterly holdings predate the Anthropic announcement and do not show how funds responded to that agreement.
Despite the spending requirements, Cramer viewed the stock’s retreat as an opportunity, as he commented:
Initially, the stock spiked in response as it should. But now it’s given back all of those gains and then some. Well, that feels like a buying opportunity to me… So, have you missed it or can… [it] keep running?… Akamai, I think you can buy that stock right here, right now because it’s cheap, selling for less than 16 times this year’s earnings estimates, and you’re basically getting the latest Anthropic partnership, which I thought was gigantic, for free. Sure, they’re having a down year because of all that spending that I mentioned, but that’s about to take a turn for the better real soon.
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