Key Takeaways
- Akamai CEO Tom Leighton bought about $2.6 million of stock on Nov. 13, with shares 48% below their May high.
- Akamai trades below its five-year average forward P/E, and analysts expect earnings to jump in 2028 as its big cloud contracts ramp up. So the numbers back his buy.
- The main risk is funding: Akamai sold $2.5 billion of convertible notes the week after its report to pay for a heavy buildout.
- The buy adds only about 1% to Leighton’s stake. The next check is whether Akamai’s third big cloud contract goes live this quarter as planned.
Akamai Technologies (AKAM) CEO Tom Leighton bought 30,000 shares of the company’s stock on Nov. 13. He paid a weighted average of $85 a share, or about $2.6 million in all, according to the Form 4 he filed the same day. The stock is 48% below its 52-week high of $165, set in May.
Two months of delays, then $2.5 billion of new debt
Akamai’s third-quarter report on Nov. 5 showed revenue up 6% to $1.12 billion. Cloud Infrastructure Services (CIS) revenue rose 34% to $109 million. But supply chain and third-party data center delays on two big cloud deals push about $30 million of revenue into 2027. On the call, Leighton called the delays “not a big deal, a couple of months of delay.”
The bigger question is the money. Akamai plans to spend $2.445 billion to $2.645 billion on capex this quarter alone. CFO Ed McGowan said it would pay for its buildout mainly from cash and operating cash flow, “which may be supplemented by measured incremental financing activities as appropriate.” On Nov. 12, the day before Leighton bought, Akamai closed an upsized $2.5 billion offering of convertible notes.
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A small add to a big stake
Leighton co-founded Akamai in 1998, and this purchase adds about 1% to his stake. The Form 4 shows him holding 2,559,963 shares after it, held indirectly and worth well over $200 million at today’s price. So $2.6 million is a small bet for him. He also bought about $2 million of stock in May 2024 at an average of $93. Today’s price is still below that. His buys in February and August 2025, at about $80 and $72, are both ahead. For anyone who tracks insider buying, that makes Leighton a repeat dip buyer whose timing has been mixed.
Does $85 add up?
The bull case is 2027. Akamai has signed more than $14 billion of multi-year CIS commitments this year, including the $11.6 billion Anthropic deal in September. It expects CIS revenue to more than double to $1.1 billion to $1.3 billion in 2027, and total revenue to top $7.0 billion in 2028.
Analysts expect earnings to dip this year, then jump as that revenue arrives:
The estimates for this year and next have slipped, though. This year’s consensus was $6.70 three months ago, and 2027’s was $7.16.
The market isn’t paying for that 2028 jump yet:
At the last close, Akamai traded at 13x forward earnings. That’s below its five-year average of 16x and far below the 24x it reached in May, and today’s price leaves it about there.
The analysts’ consensus target has come down since July but still sits well above the price:
At $133, the consensus target is about 56% above today’s price. However, the median target is lower, at $120, and the targets run from $73 to $225.
The ramp has to land
The risk is the balance sheet. Akamai carried $7.57 billion of convertible notes on Sept. 30, before the new $2.5 billion. Its spending will also run ahead of revenue until the contracts ramp up.
Bottom line: the numbers back Leighton at $85. The stock trades below its usual multiple, and the 2028 guidance points to a much bigger business. But one insider’s purchase is a signal that still needs the 2027 ramp to show up. The next checks are the third big contract going live this quarter, as management expects, and the fourth-quarter report early next year.
So what is Akamai stock actually worth?
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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!
