Akamai has emerged as a future AI beneficiary, with a business transformation that has significantly reshaped its long-term growth trajectory. Historically known as a content delivery (CDN) provider, Akamai has recently repositioned itself as an edge-native cloud and AI computing platform, leveraging its global infrastructure footprint to deliver low-latency, low-cost inference workloads. This shift is finally showing up in the numbers, as computing revenue grew nearly 40% year-over-year and operating margins expanded despite increased AI spending. With management successfully transitioning from low-margin distribution to high-margin AI and security, Akamai enters 2026 with meaningful upside options as AI inference moves to the edge. Trade Timing and Outlook AKAM’s breakout of the $84 resistance and recent retest as support is consistent with outperformance of the S&P 500, suggesting there are attractive risks to reward entry at these levels. The stock’s ability to maintain support despite market volatility reflects the company’s growing confidence in its AI cloud axis, and the upside price target is $102. The Basics AKAM trades at a 50% discount to its cloud and cybersecurity peers despite stronger profitability and improved revenue mix. Forward P/E ratio: 11.43x (industry average 22.53x) Forward EPS growth: 7.21% (vs. industry average 10.99%) Forward revenue growth: 5.62% vs. industry average 9.35% Net profit margin: 12.26% vs. industry average 9.08% Bullish thesis High-margin AI/cloud transformation: Powered by Nvidia Compute revenue grew ~39% year-over-year in Q3 2025 as Akamai Inference Cloud began scaling. Margin expansion: Operating margins reached 31%, demonstrating the economic benefits of the move to security and computing. Security cross-selling: Zero trust, API security, and application protection products continue to grow at double-digit rates. Attractive Valuation: As Security + Computing approaches 60% of total revenue, AKAM’s multiple revenue streams for early-teens companies become attractive compared to fast-growing companies. Advantages of edge inference: If you migrate even a small portion of your inference workloads from AWS/Azure, Akamai’s edge cloud footprint represents meaningful TAM expansion. Options Trading With an IV rank of 10%, options remain attractively priced for bullish exposure. Buy $85/$95 call vertical @ $3.30 debit on January 16, 2026. This means: Buy to open $85 call on January 16, 2026 ($3.90) Sell to open $95 call on January 16, 2026 ($0.60) Maximum prize: $670 per contract if AKAM exits above $95 at expiration. Maximum Task: $330 per contract if AKAM ends at less than $85 at expiration. Breakeven @ $88.30 View this trade at updated price on OptionsPlay This defined risk structure targets the upside participation in AKAM’s AI cloud transformation while limiting the downside as the company continues to revalue its peers to benefit from AI-driven infrastructure demands. Disclosure: Zhang holds a position at AKAM. The opinions expressed by CNBC Pro contributors are solely their own and do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliate companies, and may have been previously disseminated on television, radio, the Internet, or another medium. The above is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any securities or other financial assets. The Content is general in nature and does not reflect any individual’s unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor. Click here for full disclaimer.
