Akamai Stock Falls 22% in 3 Months as AI Growth Meets Execution Risks

Akamai’s 22% Decline Tests the AI Growth Story

The company reported second-quarter revenue of $1.1 billion, up 5% year over year, while Cloud Infrastructure Services revenue rose 39% to $99 million. The results give investors a basis to weigh Akamai’s growth outlook against its near-term operating pressures.

That growth is supported by more than $2.8 billion of multiyear Cloud Infrastructure Services commitments signed year to date. Management also expects overall revenue growth to accelerate into the low teens in 2027. These developments provide a stronger growth case, but they do not establish a direct reason for the recent stock move.

Akamai Cloud Growth Is Accelerating

Cloud Infrastructure Services is becoming a larger contributor to Akamai’s growth profile. Revenue increased 39% year over year in the second quarter, and management expects the business to grow at least 50% in 2026, with further acceleration expected in the fourth quarter and 2027.

NVIDIA Corporation NVDA reported first-quarter fiscal 2027 Data Center revenue of $75.2 billion, up 92% year over year, underscoring the scale of AI-related infrastructure demand. Cloudflare, Inc. NET reported 34% year-over-year revenue growth in the first quarter of 2026 as AI reshaped demand for its connectivity cloud.

Akamai Still Faces Delivery Headwinds

Akamai’s Delivery and other cloud applications revenue fell 6% year over year to $395.9 million in the second quarter. The decline contrasts with gains in Security and Cloud Infrastructure Services, leaving faster-growing businesses to offset weakness in Delivery.

Security revenue provided another source of growth, rising 10% year over year to $604 million. Still, the mixed segment performance means the pace at which cloud infrastructure expands matters more as Akamai works through pressure in its older business.

Akamai Must Balance Growth With Investment

The transition toward AI infrastructure is requiring substantial spending. Second-quarter capital expenditures were $347 million, or 32% of revenue, while expanded colocation investments, higher depreciation and increased headcount costs pressured profitability. Non-GAAP operating margin was 25%, down five percentage points year over year.

Akamai also expects third-quarter capital expenditures of $475 million to $525 million. In addition, it plans to invest up to $500 million to replenish and expand GPU capacity, with about $60 million expected to be spent in 2026. The scale and timing of these investments raise execution demands as the company ramps its new business.

Akamai’s Rank Frames the Pullback

Akamai currently carries a Zacks Rank #4 (Sell), alongside a Value Score of D, Growth Score of F, Momentum Score of A and VGM Score of D. The Style Scores complement the Zacks Rank by measuring value, growth and momentum characteristics, with the VGM Score combining the three styles.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The D Value Score and F Growth Score point to weaker value and growth characteristics, while the A Momentum Score reflects favorable momentum characteristics under the Zacks methodology. The combination provides a mixed backdrop for the stock. The AI opportunity is expanding, but investors still face a transition that requires rapid growth in Cloud Infrastructure Services, continued investment and progress in offsetting Delivery weakness.

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