Akamai downgraded by BofA, Piper Sandler on multi-year transition concerns

Investing.com -- Akamai Technologies Inc (NASDAQ: AKAM) downgraded to Neutral by both BofA and Piper Sandler given near-term uncertainty as the company transitions toward higher-growth areas like API security and cloud infrastructure.

BofA lowered its price target to $100 from $125, noting Akamai’s shift away from slower-growth segments such as web security and legacy compute. The firm highlighted muted 2025 guidance of 3% revenue growth, below consensus expectations of 7%, and projected a return to double-digit growth only by 2029.

Piper Sandler also cut its rating to Neutral, stating that the transition creates "messiness ahead," with concerns around low core security growth, declining margins, and higher capital expenditures. The firm lowered its price target to $100, questioning the achievability of Akamai’s new long-term targets.

Despite the downgrades, analysts noted strong momentum in newer segments, including cloud infrastructure services, which grew 32% year-over-year, and API security, up 51%. Akamai’s recent $100 million deal with TikTok made the platform its largest customer, contributing about 6% of total revenue.

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