BofA raises Akamai stock price target on $11.6B Anthropic deal

BofA Securities has increased its price target on Akamai Technologies to $185 from $175, maintaining a Buy rating. This decision comes after the company announced a $11.6 billion CPU cloud deal with Anthropic that spans seven years. The deal is expected to generate $1.7 billion annually after 2027, with a warrant component allowing Anthropic to purchase 3.1 million shares at $111.33.

Akamai sees potential for a $9 billion expansion beyond the initial commitment, which would include additional warrants amounting to up to 7.7 million shares. The company will invest $4.8 billion over the next five quarters to support the deal, surpassing its previous $1.8 billion cloud win and significantly outpacing its CIS business, which was valued at $99 million last quarter.

Analysts have cited this deal as a major milestone for Akamai, with BofA Securities raising its price target based on a projected 23 times price-to-earnings ratio for 2029. Despite recent stock volatility, Akamai's shares have already delivered a robust 46% return over the past year.