Bank of America elevated its rating on Akamai Technologies to Buy, saying the company’s transformation from a traditional content-delivery network provider into an AI-focused infrastructure supplier is starting to resonate with investors and corporate customers.
The brokerage raised its price objective to $175 from $130, which it said implies roughly 18% upside from Tuesday’s close of $149.56. Analysts led by Tal Liani pointed to growing demand for distributed AI computing and edge inference workloads as central to the reassessment of Akamai’s growth prospects.
Cloud Infrastructure Services driving re-rating
At the center of BofA’s bullish case is Akamai’s Cloud Infrastructure Services unit, which the firm estimates is expanding at about 40% year-over-year. According to the analysts, enterprises are increasingly seeking ways to deploy latency-sensitive AI workloads outside centralized hyperscale clouds, supporting stronger uptake of distributed infrastructure and edge compute.
As a concrete indicator of commercial traction, BofA flagged a newly signed $1.8 billion, seven-year infrastructure agreement. The brokerage said this deal demonstrates that demand for distributed AI capacity is manifesting in large, multiyear commitments rather than remaining speculative interest.
BofA anticipates the agreement will begin contributing $20 million to $25 million in quarterly revenue starting in the fourth quarter, and that it will help accelerate a shift toward recurring, capacity-based infrastructure sales that supplement Akamai’s existing revenue mix.
Financial forecasts and valuation changes
The analysts now see Akamai’s revenue growth accelerating to 11.4% in 2027, up from an expected 8.2% in 2026. They also project earnings per share to rise to $9.03 by 2028 from an estimated $6.93 in 2026. To reflect the improved outlook, BofA lifted its valuation multiple to 22.5 times projected 2027 earnings, up from 17 times previously, while noting that the multiple remains below those assigned to pure-play cloud computing peers.
Near-term costs and cash flow impact
Investment in the AI infrastructure push is expected to weigh on near-term margins and cash generation. BofA estimates capital expenditures could increase to as much as $825 million over the next 12 months as Akamai expands its infrastructure footprint. As a result, free cash flow is projected to decline nearly 48% in 2026 before recovering in later years.
Those additional investments are intended to support the shift toward capacity-oriented, recurring infrastructure revenue, even as Akamai’s legacy delivery business continues to face headwinds. The brokerage noted the traditional delivery unit’s revenue fell 7% year-over-year.
Analysts' view on strategic trajectory
Despite the near-term drag from higher capex and temporarily reduced free cash flow, BofA’s analysts argued that markets may be underestimating Akamai’s capacity to evolve from content delivery to a hybrid edge-and-core compute platform that competes for workloads currently hosted in large cloud environments. The valuation and forecast changes signal the brokerage’s enhanced conviction in an AI-driven revenue transition.
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Conclusion
Bank of America’s upgrade and higher target reflect growing confidence that Akamai’s AI infrastructure strategy is gaining commercial footing through accelerating Cloud Infrastructure Services growth and a large, multiyear infrastructure agreement. The outlook incorporates materially higher capital spending that will pressure free cash flow in the near term but is expected to help drive a transition to recurring, capacity-based revenue and stronger revenue and EPS growth in coming years.