Will Surging Profits and Share Buybacks Reshape Akamai Technologies' (AKAM) Investment Story?

• Akamai Technologies reported its third-quarter 2025 results earlier this month, with revenue rising to US$1,054.63 million and net income increasing to US$140.17 million, while also issuing financial guidance for the fourth quarter and full year and confirming completion of a significant share repurchase program.
• Net income more than doubled compared to the prior year, highlighting a marked improvement in profitability alongside continued focus on shareholder returns through stock buybacks.
• We'll now explore how Akamai's robust earnings growth and updated revenue forecasts may influence its long-term investment thesis.

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Akamai Technologies Investment Narrative Recap

For investors considering Akamai Technologies, the key belief is in the company's ability to transition from its core legacy CDN business to higher-growth cloud infrastructure and cybersecurity. The recent Q3 earnings report, which showed strong revenue and profit growth with updated bullish guidance, did not materially alter the short-term catalyst: accelerating contribution from cloud and edge compute ARR, nor did it reduce the risk that the legacy delivery segment may continue to drag on topline growth due to competitive and structural headwinds.

Among the recent announcements, Akamai's completion of a significant share repurchase program stands out, reflecting management's focus on maximizing shareholder returns and supporting earnings per share. This buyback, totaling over US$819 million for nearly 7% of shares, can act as a buffer while the company works to offset legacy revenue pressures, underscoring the importance of new revenue streams from cloud and security to justify further capital returns.

However, investors should also be aware that, despite these actions, pressure from commoditization and a shrinking legacy segment still poses a risk if...

Read the full narrative on Akamai Technologies (it's free!)

Akamai Technologies' outlook anticipates $4.9 billion in revenue and $765.1 million in earnings by 2028. This assumes annual revenue growth of 6.1% and an earnings increase of $340.5 million from the current level of $424.6 million.

Uncover how Akamai Technologies' forecasts yield a $95.20 fair value, a 9% upside to its current price.

Exploring Other Perspectives

Six fair value estimates from the Simply Wall St Community range from US$66 to US$131.64 per share. While revenue growth in cloud and edge services remains a primary driver, opinions on Akamai's future performance remain divided, explore these viewpoints to make an informed decision.

Explore 6 other fair value estimates on Akamai Technologies - why the stock might be worth 25% less than the current price!

Build Your Own Akamai Technologies Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Akamai Technologies research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Akamai Technologies research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Akamai Technologies' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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