NET - Akamai: Slowdown In Content Delivery Is Faster Than Expected (Downgrade)

2024-07-11 15:15:02 ET

Summary

• Akamai Technologies, Inc.'s Security and Compute segments are growing at healthy rates, but its Delivery business is experiencing a significant slowdown, slowing more than expected.
• Management expects a further decline in Akamai's Delivery segment due to factors such as customer spend optimization patterns and competition.
• Despite positive factors like acquisitions and tailwinds in its Compute & Security segments, Akamai's upside for this year looks uncertain.

Investment Thesis

Earlier this year, I covered Akamai Technologies, Inc. ( AKAM ) in a research note where I noted the positive developments Akamai, the maker of network delivery optimization and security products, was making in growing its security business portfolio at a 20% compounded growth rate. Akamai has been growing the Security and Compute segments of its business portfolio at healthy rates, which I noticed in its Q1 FY24 earnings report as well....

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