To The Moon

$Akamai(AKAM)$ is scheduled to report its fiscal Q4 2025 earnings on Thursday, February 19, 2026, after the market closes. The stock enters this report with significant tailwinds, having surged over 10% last week following a series of analyst upgrades and positive spillover from Cloudflare's (NET) strong results. This sets a high bar for the company to clear.

Key Estimates & Expectations

Wall Street is looking for steady growth, though estimates vary slightly across platforms:

Revenue Consensus: $1.07 billion (approx. 5% YoY growth).

Adjusted EPS Consensus: $1.75 (vs. $1.66 in Q4 2024).

Full-Year 2025 Guidance: Management previously targeted total revenue of $4.13B – $4.20B and EPS of $6.93 – $7.13.

Akamai's Q3 2025 earnings, reported in November 2025, were a major turning point for the stock. It was not just a "beat and raise"—it was the moment the market finally began to value Akamai as an AI-infrastructure player rather than just a legacy content delivery network (CDN).

The stock surged roughly 14.7% following the report, marking one of its best post-earnings performances in years.

Q3 2025: The Numbers

Akamai beat expectations across all key financial lines:

Revenue: $1.055 billion (up 5% YoY), surpassing the $1.04B consensus.

Non-GAAP EPS: $1.86, a massive beat compared to the $1.64 estimate.

Operating Margins: Expanded to 31%, showing strong cost discipline even as they pivot.

Segment Breakdown:

• Security: $568 million (+10% YoY). High-growth products like API security and Zero Trust grew 35% YoY.

• Cloud Infrastructure (CIS): $81 million (+39% YoY). This was the star of the show, accelerating from 30% growth in Q2.

• Delivery (Legacy CDN): $306 million (-4% YoY). This decline was actually viewed positively as "stabilization" compared to previous fears of a freefall.

The Big Announcement: Akamai Inference Cloud

The catalyst for the double-digit stock pop was the unveiling of the Akamai Inference Cloud, powered by NVIDIA GPUs.

• The Strategy: Akamai is moving AI "to the edge." Instead of running AI in massive, centralized data centers (like AWS or Azure), Akamai uses its 4,100+ global locations to run AI inference closer to the end user.

• The Upside: Management noted that AI inference contracts could be significantly larger than typical compute deals, potentially ranging from $50M to $100M per client.

Lesson Learnt: The "Value Trap" Escape

The biggest lesson from the Q3 report and subsequent guidance is about narrative shift. For years, Akamai was viewed as a "value trap"—a steady cash-flow generator whose core business (CDN) was being commoditized.

The Lessons for Investors:

1. Guidance is about Quality, not just Quantity: Akamai raised its full-year EPS guidance ($6.93 – $7.13), but the reason for the raise mattered more than the numbers. The market rewarded the fact that growth is now coming from Compute and Security, which carry higher multiples than Delivery.

2. Edge AI is the New Frontier: The "lesson" management hammered home is that while the last two years were about training AI models (benefiting NVIDIA), the next phase is about running them (Inference). Akamai’s massive distributed footprint makes them a legitimate competitor to hyperscalers for low-latency AI tasks.

3. Stability in the Core is Enough: You don't need the legacy business (CDN) to grow; you just need it to stop shrinking rapidly. By showing that Delivery revenue is "stabilizing," Akamai cleared the path for its high-growth segments to shine.

Looking Ahead

As we approach the Q4 2025 report tomorrow, the "lesson" will be whether they can execute on the Inference Cloud deals they teased in Q3. The stock has already run up significantly—investors are no longer just looking for a "beat," they are looking for proof of AI scale.

Key Metrics to Watch

The "old" Akamai was a Content Delivery Network (CDN) company; the "new" Akamai is a Cloud Security and Computing powerhouse. Investors will focus on this transition:

1. Cloud Infrastructure Services (CIS) Growth: This is the "AI play." In Q3, this segment grew 39% YoY. Investors want to see if the newly launched NVIDIA-powered Inference Cloud is gaining early traction. Any acceleration here could justify the recent price surge.

2. Security Segment Revenue: This is now Akamai’s largest segment (over 50% of revenue). Growth has been hovering around 10–14%. Because security is a high-margin business, a beat here directly impacts the bottom line.

3. Delivery Margin Stabilization: The legacy CDN business has been shrinking (down 4% in Q3). While a decline is expected, investors are looking for the "bottoming out" signal. If delivery revenue declines faster than anticipated, it could drag down the overall growth narrative.

Akamai (AKAM) Price Target

Based on 23 analysts from Tiger Brokers app offering 12 month price targets for Akamai in the last 3 months. The average price target is $103.47 with a high forecast of $134.00 and a low forecast of $69.00. The average price target represents a -4.56% change from the last price of $108.42.

Short-Term Trading Opportunities

AKAM is currently in a "buy the rumor" phase. Here is how to play the "news":

The "Beat and Raise" Scenario: If Akamai beats on CIS growth and raises its 2026 outlook citing AI inference demand, the stock could challenge the $120 – $125 level (DA Davidson recently raised its target to $125).

The "Volatility Hedge" (The Cloudflare Effect): AKAM often trades in sympathy with Cloudflare. Since NET already had a strong run, much of the sector's optimism is already baked into the price. If Akamai merely meets expectations without a major guidance hike, we may see a "sell the news" reaction back toward the $100 support level.

Implied Move: Based on recent sessions, the market is pricing in roughly a 5–8% move post-earnings.

Trader's Note: Keep an eye on the Non-GAAP Operating Margin. Management has been tight on costs (targeting 29-30%). A surprise expansion in margins would be a strong catalyst for a post-market pop.

Summary Table

Technical Analysis - Exponential Moving Average (EMA)

We saw AKAM makes a recent new highs last week but there is a slight decline during volatile trading on Tuesday (17 Feb), but the overall investors sentiment remain positive as market is looking to see if Akamai beats on CIS growth and raises its 2026 outlook citing AI inference demand, then we could see AKAM bulls trying for the $120 to $125 level, if that happen, we could see an upside continuation formed.

But we need to understand that AKAM often trades in sympathy with $Cloudflare, Inc.(NET)$, which it has a strong run, so the cybersecurity sector’s optimism might already been factored in the share price, so if AKAM just show that it just manage to beat estimates and a mediocre guidance given, then we might see sell off trigger towards a $100 price support level.

Summary

Akamai (AKAM) is scheduled to report its fiscal Q4 2025 earnings on Thursday, February 19, 2026, following a massive 20% YTD surge in share price. This report is seen as a critical test of Akamai’s transition from a legacy CDN provider to a high-growth AI and security leader.

Key Estimates & Expectations

• Revenue Consensus: $1.07B – $1.08B (approx. 5.5% YoY growth).

• Adjusted EPS Consensus: $1.75 (up from $1.66 in Q4 2024).

• Implied Volatility: The market is pricing in roughly a 5–8% move post-earnings.

The Bull Case: "The AI Inflection"

The primary driver for recent stock strength is the Akamai Inference Cloud, powered by NVIDIA Blackwell GPUs.

• Metric to Watch: Cloud Infrastructure Services (CIS) revenue growth. After growing 39% in Q3, investors want to see if Akamai is successfully landing the $50M+ "Edge AI" contracts management teased previously.

• Security Strength: Investors expect Security revenue to hit roughly $590M (+10% YoY). Any beat here, particularly in API security, signals high-margin resilience.

The Bear Case: "Sell the News"

With the stock hitting 52-week highs ($111+) just days before the report, expectations are sky-high.

• CDN Drag: Delivery revenue is projected to decline by ~8%. If this legacy segment drags more than expected, it could overshadow AI gains.

• Guidance Risk: The "lesson" from 2025 has been that Akamai must provide aggressive FY2026 guidance to maintain its new, higher valuation. A conservative outlook could trigger a sharp pullback to the $100 support level.

Short-Term Trading Outlook

Akamai has beaten EPS estimates for four consecutive quarters. However, because the stock is "extended" (trading at a 28x P/E), a standard "beat" may not be enough.

• Upside Target: A "beat and raise" driven by AI momentum could push shares toward analyst targets of $120 – $125.

• Downside Risk: If margins contract or AI commentary is vague, expect a "buy the rumor, sell the fact" reaction.

Appreciate if you could share your thoughts in the comment section whether you think AKAM could beat on CIS growth and raises its 2026 outlook citing AI inference demand.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.