Akamai Technologies’ shares surged after announcing an $11.6 billion, seven-year deal with AI firm Anthropic for crucial computing capacity. This strategic partnership, which could expand to $20 billion, focuses on CPU resources vital for advanced AI development.
Wall Street analysts responded enthusiastically, with multiple firms raising price targets and highlighting Akamai’s improving growth profile. The deal involves significant capital expenditure for Akamai and positions them as a key infrastructure provider in the booming AI sector.
Akamai Soars on $11.6 Billion Anthropic AI Deal: Wall Street Reacts
Cloud provider and cybersecurity firm Akamai Technologies saw its shares surge significantly after announcing a substantial seven-year deal worth $11.6 billion with artificial intelligence leader Anthropic. This agreement provides Anthropic with added computing capacity, signaling a major boost for Akamai's cloud infrastructure services.
The deal, which could potentially be expanded to $20 billion, focuses on providing Central Processing Units (CPUs) rather than Graphics Processing Units (GPUs), a move many technologists believe is crucial for agentic AI applications. Akamai's stock briefly jumped as much as 16.4% following the news, settling to a gain of around 8% by mid-day Friday. This partnership is expected to drive significant capital spending for Akamai, estimated at $5.5 billion, to build out the necessary capacity.
Data centers are crucial for AI computing capacity.
Analysts on Wall Street reacted positively to the news, with several firms upgrading their ratings and price targets for Akamai. Morgan Stanley highlighted that the deal "materially improving" Akamai's structural growth profile, potentially increasing revenue growth estimates. Piper Sandler noted the deal's impressive magnitude, suggesting Akamai is transitioning from a "value" asset to a "hypergrowth" asset.
DA Davidson calculated the deal to be worth approximately 77 megawatts of computing power, though Akamai has not officially disclosed specific power requirements. The firm estimates a healthy EBIT margin of around 30% for Akamai's cloud infrastructure services based on year-to-date commitments. Oppenheimer also provided analysis, breaking down the capital expenditure per megawatt.
This agreement positions Akamai as a key player in providing the necessary infrastructure for advanced AI development, supporting Anthropic's escalating CPU workload demands. The company's vision for Akamai Cloud extends beyond this deal, showcasing diverse applications including conversational voice agents, robotics, real-time virtual world generation, and AI video intelligence.
Analyst Ratings and Price Targets:
Morgan Stanley: Overweight, $165
Piper Sandler: Overweight, $158
DA Davidson: Buy, $185
Oppenheimer: Outperform, $180
Evercore ISI: Outperform, $175
Evercore ISI views the deal as reinforcement of their multi-year revenue reacceleration thesis for Akamai's cloud infrastructure services, with further acceleration expected in 2028. They also noted that the partnership with Anthropic does not prevent Akamai from collaborating with other leading AI labs.
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