HSBC Downgrades Akamai Technologies (AKAM) to Hold

HSBC analyst Stephen Bersey downgraded Akamai Technologies (NASDAQ: AKAM) from Buy to Hold with a price target of $123.00 (from $171.00).

The analyst comments: “Revenue came in at USD1,100m, 5.4% y-o-y and in-line with estimates. Non-GAAP operating margin was 24.62%, -4.96pp y-o-y and below HSBCe (26.35%) and consensus (25.45%). Non-GAAP EPS was USD1.59, -8.1% y-o-y and in-line with HSBCe (USD1.61) and consensus (USD 1.58). Better than expected other income helped non-GAAP EPS. Akamai cut its 2026 non-GAAP operating profit estimate to USD1,144m (from USD1,169m), which was below the pre-results consensus of USD1,171m. A significant part of the cut appears to be due to LayerX acquisition, which is likely to be margin dilutive initially. The company expects its 2027 revenue to rise by low teens percent vs “double digits” previously.

We expect segment revenue to rise at a 2025 28e CAGR of 56.8% because: 1) Akamai received orders totaling more than USD2.8bn YTD; 2) there is significant demand for AI edge compute and Akamai is uniquely positioned to provide it due to its geographically distributed local server network. The company expects infrastructure revenue to rise by at least 50% in 2026e. As 1H26 growth was c39.5%, guidance implies significant acceleration in 2H26.”

For an analyst ratings summary and ratings history on Akamai Technologies click here. For more ratings news on Akamai Technologies click here.

Shares of Akamai Technologies closed at $110.54 yesterday.

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