Akamai Stock Pops as Wall Street Raises Targets on $20B AI Deal

Akamai just landed the biggest contract in its 27-year history, and Wall Street's analysts spent Friday scrambling to raise their price targets. The stock jumped as much as 16% intramorning before settling to close up around 3%, but the real story is what's happening under the hood of Akamai's cloud business.

The company disclosed a seven-year, $11.6 billion cloud infrastructure deal with Anthropic, the AI lab behind the Claude chatbot. The agreement can expand by another $9 billion, pushing the total contract value toward $20 billion — making it, by a wide margin, the largest deal Akamai has ever signed.

What makes this different from the usual AI infrastructure headline is the hardware. Anthropic is buying CPU-based computing capacity from Akamai, not the GPU clusters that dominate AI training. Analysts note that CPU networks are increasingly the preferred setup for the coordinated, agentic AI workloads that inference — running a trained model, rather than building one — requires, a distinction that as CNBC reported this week is reshaping how Wall Street values the stock.

"The bookings momentum with CIS increasingly validates the thesis that the structural growth profile for Akamai is materially improving." — Morgan Stanley analysts, in a note to clients

That's not a lone voice. Piper Sandler lifted its target to $158 from a lower level and called Akamai a name transitioning from a "value" asset to a "hypergrowth" one. DA Davidson went further, setting a $185 target and a Buy rating, while Guggenheim set the boldest number on the Street at $225. Evercore ISI held its Outperform rating with a $175 target, and Oppenheimer priced the deal out at roughly 77 megawatts of dedicated computing power.

The deal also comes with an equity kicker. Anthropic received a warrant to buy up to 5% of Akamai's shares at $111.33, with 2% vesting immediately and the rest unlocking as Anthropic's spending commitments grow — each additional $3 billion in spend unlocks another 1% of the warrant. That aligns Anthropic's incentives with actually using the capacity it's paying for, rather than just parking a contract on paper.

For retail investors, the appeal of AKAM here is that it's a way to play the AI infrastructure boom without betting on a single chipmaker. Akamai has now signed $14.6 billion in total cloud infrastructure commitments year-to-date, and analysts estimate that book of business carries roughly a 30% EBIT margin at full run-rate — a healthy profile for a company trading at a price-to-earnings multiple of around 41.

The risk here is real, though. Akamai has to spend to earn this — the buildout tied to the Anthropic deal alone is expected to run $5.5 billion in capital expenditures, and that's before any of the expansion options kick in. A single-customer concentration risk also exists: if Anthropic's own AI spending plans slow down, so does this specific growth driver, even if Akamai's broader cloud pipeline stays intact.

It's also worth putting the deal size in context of Akamai's own recent history. As recently as its second-quarter earnings call in August, the company reported $2.8 billion in multi-year cloud commitments from customers — a number that this single Anthropic agreement more than triples. That kind of jump in one deal is unusual for a company that's been steadily transitioning away from its legacy content-delivery-network roots toward cloud infrastructure and security.

What to watch next: Akamai's next quarterly report will show how much of that $1.66 billion in projected annual recurring revenue from the deal is actually showing up in the numbers versus still-ramping capacity. A level worth watching on the chart is the $113-$114 zone where shares settled after the initial pop faded — a hold above that on any pullback would suggest the market is treating this as a durable re-rating rather than a one-day news spike.

Bottom line: this isn't just a headline deal — five separate Wall Street firms raised targets within hours, and that kind of unanimous conviction on a single contract is rare.