The Akamai Technologies logo and lettering can be seen on the headquarters building of the company’s German headquarters in Garching, near Munich, Bavaria.
Matthias Bork | Picture Alliance | Getty Images
Akamai’s The company soared Friday after announcing a $1.8 billion deal with an AI company and reporting first-quarter profits that met expectations.
The stock rose 16% immediately after the opening bell, and over the past 12 months, the stock is up 37%.
Akamai CEO Tom Leighton said in a press release Thursday that the “leading frontier model provider” has committed to investing $1.8 billion over seven years in cloud infrastructure services. He did not name the provider.
The American cybersecurity and cloud computing company reported Thursday that first-quarter revenue rose 6% to more than $1 billion.
The company’s cloud infrastructure services revenue increased 40% to $95 million, and security revenue increased 11% to $590 million. Meanwhile, delivery and other cloud applications revenue decreased 7% to $389 million in the quarter.
Akamai said it expects second-quarter revenue of $1.08 billion to $1.1 billion and adjusted net income per share of $1.45 to $1.65.
“We operate the most distributed platform in the world, with infrastructure in 4,300 locations in 700 cities in 130 countries. We’ve used it to deliver content and provide security to stop any attack, and now we’re using it to support AI, so customers, agents, and AI apps can run closer to users, and data delivers faster experiences,” Leighton said Friday on CNBC’s “Squawk. Box”.
inference cloud
Akamai Chief Technology Officer Robert Brumofe told CNBC last week that the company is expanding its cloud infrastructure business to meet the growing demand for AI workloads and position itself alongside major AI model developers such as OpenAI and Anthropic.
Blumofe explained that the company has three main pillars: content delivery, cybersecurity, and cloud infrastructure services.
“The third pillar of our business is more recent and is what we call cloud infrastructure services.…In fact, this is the fastest growing part of our business, but it is the smallest of the three pillars,” Blumofe said.
Akamai stock price since the beginning of the year.
He added that Akamai already runs an AI operations inference cloud that provides the computing power, data storage, and tools needed to run AI applications.
It currently operates from multiple locations that ensure a strong connection with users. The company plans to further expand and improve the way it manages resources across its network.
“I think we’ve been undervalued for some time. Investors have been looking for real validation that our different approach works. And now we’re getting that validation, and we have a very strong pipeline of large enterprise customers, including customers 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.
