Akamai stock soars after $1.8 billion AI infrastructure deal
The Akamai Technologies logo and lettering can be seen on the headquarters building at the company’s German headquarters in Garching, near Munich (Bavaria).
Matthias Balk | Picture Alliance | Getty Images
Akamai The stock jumped in early trading Friday after it announced a $1.8 billion deal with an artificial intelligence company and reported first-quarter earnings in line with forecasts.
The stock was last up 22.3% in premarket trading, and shares are up 37% in the last 12 months.
Akamai CEO Tom Leighton said in a press release Thursday that the “leading pioneering model provider” has committed $1.8 billion over seven years for cloud infrastructure services. He did not name the provider.
The American cybersecurity and cloud computing firm reported Thursday that its first-quarter revenue rose 6% to more than $1 billion.
The company’s cloud infrastructure services revenue increased by 40% to $95 million, and security revenue increased by 11% to $590 million. Meanwhile, delivery and other cloud application revenue fell 7% in the quarter to $389 million.
Akamai said it expects second-quarter revenue of between $1.08 billion and $0.1.1 billion and adjusted net income per share of between $1.45 and $1.65.
“We operate the most distributed platform in the world and we have infrastructure in 4,300 locations, 700 cities in 130 countries, and we’ve used that to deliver content and provide security to block all attacks, and now we’re using that to power AI so that our customers, our agents, and our AI applications can run right next to their users and the data can deliver a much faster experience,” Leighton told CNBC’s “Squawk Box” on Friday. he said.
inference cloud
The company is scaling its cloud infrastructure business to meet growing demand for AI workloads and carve out a name for itself alongside leading AI model developers like OpenAI and Anthropic, Akamai’s Chief Technology Officer Robert Blumofe told CNBC last week.
Blumofe explained that the company has three main pillars: content distribution, cybersecurity and cloud infrastructure services.
“The third, newer pillar of our business is what we call cloud infrastructure services… and that’s actually the fastest growing part of our business, but it’s the smallest of the three,” Blumofe said.
Akamai has been sharing posts since the beginning of the year.
He added that Akamai already operates an AI-operated inference cloud that provides the computing power, data storage, and tools needed to run AI applications.
It currently operates in various locations where it can build strong connections with users. The company plans to expand further and improve the way it manages resources in its network.
“I think we’ve been undervalued for a while now and investors are looking for real validation that our different approach is going to pay off, and now we’re getting that validation and we have a very strong portfolio of large enterprise customers, including some with very large cloud needs,” Leighton told CNBC on Friday.
“We will be in a great position to enable and secure the new AI economy.”
— CNBC’s April Roach contributed to this report.
