Morgan Stanley Maintains Overweight Rating on Akamai Amid AI-Driven Growth
Morgan Stanley has reaffirmed an 'Overweight' rating for Akamai Technologies (AKAM), maintaining a price target of $165, which is about 48% above the stock's July 28 closing price. The firm acknowledges that while Q2 may be quieter than expected due to timing around major contracts, long-term growth remains intact as Akamai expands into AI infrastructure and cloud computing. Akamai recently secured a $1.8 billion seven-year contract with an unnamed frontier model company—its largest customer deal ever—which validates its value proposition in the age of AI. The Cloud Infrastructure Services segment grew 40% year-over-year to $95 million, driven by demand for AI compute resources and cybersecurity solutions. Despite a recent stock sell-off that has pushed AKAM down 31% from all-time highs, Morgan Stanley remains optimistic about Akamai's ability to meet its full-year revenue targets. The firm notes the majority of financial benefits from new contracts will materialize in Q4.
Topics: AI infrastructure Akamai cloud computing Morgan Stanley stock price target