Akamai Technologies (AKAM) shares are up about 10% this morning (shares currently trading at about $120) after the company signed a seven-year, $11.6 billion cloud deal with Anthropic.
As if the huge contract (and the counterparty) wasn’t exciting enough, Akamai gets another huge benefit: The deal also includes a warrant for Anthropic to buy up to 5% of Akamai’s shares.
The deal’s details
- A seven-year commitment worth $11.6 billion, supporting Anthropic’s CPU computing workloads on Akamai Cloud
- Room to expand by up to $9 billion more, for roughly $20 billion total. (That extra amount isn’t guaranteed.)
- Roughly $5.5 billion of total capital spending needed to deliver the initial commitment
- A 2026 capex increase of about $1.7 billion to pre-buy supplies, including memory
- A warrant giving Anthropic up to about 5% of Akamai’s shares
- No change to 2026 revenue guidance. (The contract is supposed to start back half of 2027.)
This is huge
One chart to give you a sense of things:
The $11.6 billion doesn’t hit all at once, but if you spread it out evenly over seven years, that works out to an average net impact of $1.65 billion per year.
So call it an average ~40% increase to annual revenue compared to 2025’s numbers. (Assuming Anthropic only hugs the minimum and doesn’t use any of the additional $9 billion that’s not contractually guaranteed.)
That’s…a material impact.
Let’s talk about the warrant
Anthropic can buy the equivalent of 7.7 million Akamai shares at $111.33 each. About 2% of Akamai’s shares vest with this $11.6 billion commitment, and roughly another 1% vests for each additional $3 billion Anthropic spends. Max out the $9 billion expansion and you get to about 5%.
According to Leighton, this is the first time Akamai has ever agreed to a warrant as part of a customer cloud deal. “It’s a serious step,” he told Bloomberg, “but I think in this case it made sense to do.”
Generally speaking, as an investor, I don’t love dilution. But in this case, I love it for Alkamai.
This is a huge vote of confidence from one of the most important names in the AI trade – Anthropic itself.
They like the business so much that they’re buying some of it!
Think about it this way – if Warren Buffett offered to invest in your business, you’d take that call. Maybe even at terms less advantageous than these. Because that vote of confidence is valuable in and of itself.
Same deal here.
What’s next
TD Cowen raised its price target to $149 but kept its Hold rating. The stock’s 52-week range runs from $70.82 to $165.45, so even after today’s jump, shares aren’t back near the highs.
The big questions from here: how quickly that capex goes out the door, what margins this business earns once it’s running, and whether (or how much of) the extra $9 billion ever shows up.
So what’s Akamai actually worth?
I used TIKR.com’s proprietary modeling tool, which requires just three inputs, to get a full financial model for what the stock could be worth in three years. I modeled 20% annual revenue growth to be conservative (maybe Anthropic’s spending is back-loaded, and of course it doesn’t start for another ~9 months). My model came out to about $178 a share. Pretty good upside potential from here!
Disagree with my quick envelope math? You can build your own model in 60 seconds. if you don’t have a view on the inputs, you can use the analyst consensus estimates to fill it out, and then tweak from there.
It’s simple, straightforward, and robust – using institutional-quality data…and you can build it for free.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
