Is Akamai Technologies (AKAM) Undervalued Following Its Q2 Beat And $600 Million Cloud Deal?

Akamai Technologies (AKAM) has become a talking point after Q2 2026 results that topped expectations, anchored by a new multi year US$600 million cloud infrastructure deal and a growing focus on enterprise AI security.

See our latest analysis for Akamai Technologies.

Despite the earnings beat and new contracts, Akamai Technologies has seen its share price fall 21.34% over the past 90 days and 6.77% over the past 30 days, even as the year-to-date share price return is 38.25% and the 1-year total shareholder return is 66.62%. This combination suggests strong longer-term momentum alongside near-term repricing as investors reassess cloud margins, capital expenditure plans, buybacks and AI-driven growth expectations.

If this AI and infrastructure story has your attention, it can be useful to see what else is out there in similar areas. Take a look at the 56 AI infrastructure stocks

Akamai Technologies now trades well below recent highs even as it signs large cloud deals and leans into AI security. Does that reset leave enough upside to justify the earnings, capex and margin trade off investors face?

Most Popular Narrative: 26.1% Undervalued

The most followed narrative currently anchors Akamai Technologies at a fair value of $159.30, well above the last close at $117.65. That gap rests heavily on how investors view AI driven security and cloud demand versus rising investment needs.

The proliferation of AI applications requiring secure, ultra-low-latency infrastructure benefits Akamai's globally distributed platform, as evidenced by new AI Gateway and Firewall for AI offerings. This positions the company to capture new AI-driven workloads, supporting both future top-line growth and potentially higher net margins via value-added solutions.

Read the complete narrative.

Curious what has to happen in Akamai Technologies' revenue mix, margins, and future earnings multiple for that valuation to stack up. The full narrative lays out a detailed growth runway, specific profitability assumptions, and a required pricing premium that goes well beyond simple P/E comparisons.

Result: Fair Value of $159.30 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Akamai Technologies still faces meaningful risks if cloud capex weighs on margins or if large AI related contracts ramp more slowly than expected.

Find out about the key risks to this Akamai Technologies narrative.

Another View: What Multiples Say About Akamai Technologies

The AI narrative points to Akamai Technologies trading 26.1% below a fair value estimate of $159.30. Yet on a simple P/E basis the picture is less clear. The current P/E of 41.1x is well above the US IT industry average of 18.7x and sits above a fair ratio of 34.3x.

That leaves Akamai Technologies looking cheaper than its immediate peers at 53.7x, but richer than what the broader market and the fair ratio suggest. For investors, the key question is whether AI infrastructure and security growth can justify staying closer to peer-like multiples rather than trending back toward that fair ratio.

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Given the mix of optimism around Akamai Technologies' AI focus and concerns about costs and margins, it makes sense to look at the full picture yourself and not wait for the crowd to decide first. To see how the upside and downside stack up side by side, review the 1 key reward and 1 important warning sign.

Looking for more ideas beyond Akamai Technologies?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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