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Akamai (AKAM): Reassessing Valuation After Recent Share Price Rebound

Simply Wall St · 2d ago

Akamai Technologies (AKAM) has quietly outperformed the broader market over the past month, with the stock climbing about 19% even as its one year return remains negative and longer term performance mixed.

See our latest analysis for Akamai Technologies.

That surge over the last month, reflected in an 18.7% 30 day share price return to about $86.60, stands in contrast to a roughly 11.7% slide in the 1 year total shareholder return. This suggests short term momentum is building even as the longer trend remains underwhelming.

If Akamai’s recent rebound has you rethinking the space, this could be a good moment to explore other tech names, using high growth tech and AI stocks as a starting point for fresh ideas.

With shares still trading below analyst targets and our estimates of intrinsic value, investors now face a key question: is Akamai a discounted play on improving fundamentals, or has the market already priced in its next wave of growth?

Most Popular Narrative: 9% Undervalued

Against Akamai Technologies last close of $86.60, the most widely followed narrative points to a higher fair value near the mid 90 dollar range, implying the recent rally still leaves room for upside if the growth story plays out.

The proliferation of AI applications requiring secure, ultra low latency infrastructure benefits Akamai's globally distributed platform evidenced by new AI Gateway and Firewall for AI offerings which positions the company to capture new AI driven workloads, supporting both future top line growth and potentially higher net margins via value added solutions.

Read the complete narrative.

Curious how steady mid single digit revenue growth, rising margins and a lower future earnings multiple can still justify a richer price tag? Want to see the detailed playbook behind that fair value call instead of guessing from the headline number?

Result: Fair Value of $95.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, looming pressures around capital intensive compute expansion and ongoing declines in legacy CDN delivery could easily derail that optimistic undervaluation story.

Find out about the key risks to this Akamai Technologies narrative.

Build Your Own Akamai Technologies Narrative

If this perspective does not fully resonate with you, or you would rather dig into the numbers yourself, you can easily craft a personalized view in just a few minutes, Do it your way.

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.

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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.