An analyst at Citi has expressed optimism for the internet infrastructure middlemen in the “content delivery network” industry, specifically mentioning Akamai Technologies and Fastly. As a result, both stocks are experiencing an upward trend on Monday.
For Akamai, analyst Fatima Boolani has highlighted a potential catalyst to watch out for in the next 30 days. This coincides with the company’s impending announcement of its fourth-quarter financial results, scheduled after the market closes on February 13.
Boolani’s research note emphasizes Akamai’s favorable operating conditions, which are aligned with the company’s conservative financial outlook. She points out that Akamai has witnessed four consecutive quarters of growth in its content delivery network business. This growth has been driven by the increasing demand from streaming video customers. Notably, she highlights the recent NFL playoff game that was streamed on Comcast’s Peacock streaming service as an example of this growing demand.
Akamai and Fastly: Analysis and Upgrades
Akamai
Akamai, a leading provider of content delivery networks (CDNs) and cloud services, is receiving positive attention from analyst Boolani. While maintaining a Neutral rating on the stock, Boolani has raised the target price to $135 from $116. This indicates a potential upside for investors.
One area that Boolani highlights is Akamai’s security software segment. This sector provides an opportunity for growth as digital threats continue to rise. Additionally, Akamai’s foray into cloud computing holds promise, as it aims to compete with industry giants like Amazon Web Services and Microsoft Azure. By hosting more of its own workloads, Akamai can improve profitability and establish itself as a major player in the cloud space.
In Monday trading, Akamai shares have seen a 1.1% increase, reaching $121.70.
Fastly
Boolani also provides insights into Fastly, a company specializing in edge cloud computing. Under the leadership of CEO Todd Nightingale, who assumed the role in September 2022, Fastly’s performance has shown improvement. This positive trajectory is one of the reasons Boolani has upgraded the stock from Sell to Neutral.
Nightingale’s clear product vision and refined portfolio/packaging strategy are expected to support balanced execution within the organization. As a result, Boolani has raised the target price for Fastly stock to $20 from $11.
Fastly shares have spiked 8% in Monday trading and are currently priced at $20.25.
Overall, both Akamai and Fastly present investment opportunities for those seeking exposure to the growing CDN and cloud computing markets. With potential upside predicted for both companies, investors may consider exploring these stocks for their portfolios.
A Positive Shift in Perspective
In a recent analysis, a prominent analyst shares her revised opinion on the outlook for Fastly shares. She emphasizes the company’s commendable efforts in rebuilding its credibility and establishing a strong track record.
According to the analyst, there is a noticeable uptick in internet traffic volumes, indicating a return to normalcy. This positive trend follows a period of consolidation after the tumultuous times caused by the pandemic.
As the industry continues to evolve, it is crucial to reassess our perspectives and adapt accordingly.
