AKAM
Akamai Technologies
Platform / Network
★ Quality 33/100Price today
$105.22
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See what it is worthcharlieapp.co
What this business is made of
The business
Akamai is the internet's highway system, with its toll eroding.
Akamai moves internet traffic so it loads fast and secure. It started as a CDN —caching content close to the user— and today it charges increasingly for cybersecurity (Guardicore, App & API Protection) and edge computing. Of $4.2B in revenue, security and compute already weigh more than the original delivery business.
A network of hundreds of thousands of servers across thousands of locations, built over 25 years. Replicating it costs capital and time that few want to spend. The problem: the hyperscalers —Amazon, Cloudflare— offer the same thing ever cheaper. The moat exists, but the water is dropping.
Revenue history
From $3.5B to $4.2B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $4.2B · FY2025
Of every $100 in sales, $89 goes to costs and operations; $11 is left as net profit (11% margin).
Catalysts and risks
Security and compute grow double-digit; if they cross 70% of revenue by 2026, the multiple re-rates.
Compute (edge cloud) targets $1B+ run-rate, competing directly against AWS on low latency.
Clean balance sheet: $0.9B in cash, zero debt, $1.0B of FCF — aggressive buybacks reduce shares every year.
The legacy CDN business is getting commoditized; Cloudflare pressures prices without mercy.
5% growth doesn't justify a high-growth platform valuation.
No real monopoly: large clients can bring delivery in-house or migrate to hyperscalers.
Charlie's note
“Paying 10.56x for a business with 59% gross margin isn't expensive, but that 5% growth gives away that the hyperscalers are already stepping on its hose; the modest multiple is the fair price of an eroding moat, not a blessing.”
Analysis · June 2026
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