Morningstar Rating

Stock Research and Analysis

by Rick Summer, CFA, CPA

Bulls Say

Although dozens of startups have competed in the CDN sector during the last decade, none of them have come close to the scale or profitability of Akamai, with many of them failing over several cycles.
Cloud computing and Internet video will continue to explode, and companies will have to invest in technologies to deliver a high-quality experience.
Many telecom firms have been acquiring CDN and related technologies. Akamai is a solid candidate given its strong intellectual property and widely deployed network. Read more 

Bears Say

As many telecom providers add CDN technology to their basket of products, they may use CDN solutions as a loss leader for their network service, further pressuring Akamai's pricing.
It's not clear that Akamai has technical superiority in delivering content that is personalized for each user, which represents most of the new challenges in Web delivery.
Akamai's premium pricing model has been coming under pressure as competitive companies have improved their networks and technology. Read more 

Management

Dr. Tom Leighton has been the CEO since the beginning of 2013, taking over from Paul Sagan. (Sagan has been the company's CEO since 2005, having joined Akamai in 1998 and serving as president from 1999 to 2010.) Given the company's long-range planning,  Read more 

Profile

Akamai is the largest provider of Internet CDN solutions in the world. The company sells products that help speed up website performance for e-commerce companies, enterprises,  Read more 

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