New York, Feb 20, 2026, 11:23 (EST) — Regular session
- Akamai shares are sliding after the company’s latest outlook flagged higher memory costs.
- The company is leaning into security and cloud compute growth, but near-term profit looks pressured.
- Investors are watching pricing moves, capital spending and any read-through for peers in edge delivery and security.
Akamai Technologies shares fell more than 9% in morning trade on Friday, extending a sharp post-earnings drop as investors weighed a weaker-than-expected first-quarter profit outlook against solid revenue growth. The stock was down 9.3% at $99.38, after closing at $109.59 on Thursday.
The pressure point is memory. CEO Tom Leighton told Reuters the company is seeing higher memory costs and may need to pass some of that through, saying the cost of memory has “probably doubled” over the past couple of months. He tied the squeeze to the rapid build-out of artificial intelligence infrastructure that has soaked up memory chip supply. (Reuters)
Akamai forecast first-quarter non-GAAP earnings per share — adjusted to exclude certain items — of $1.50 to $1.67 on revenue of $1.06 billion to $1.085 billion. For 2026, it guided revenue of $4.4 billion to $4.55 billion and capital expenditures, or capex, of 23% to 26% of revenue, a heavy spending level for a company selling network, security and cloud services. (Akamai)
Late Thursday, Akamai reported fourth-quarter revenue of $1.095 billion, up 7% from a year earlier, and non-GAAP earnings per share of $1.84. Security revenue rose 11% to $592 million, while Cloud Infrastructure Services revenue — the company’s compute and storage offering — grew 45% to $94 million, according to the company’s release. (GlobeNewswire)
Leighton said the faster-growing pieces are starting to do more of the work. He pointed to “strong customer interest” in Akamai Inference Cloud as AI-driven demand pushes more compute out toward the edge. (Yahoo Finance)
Some analysts argued the selloff is more about timing than direction. KeyBanc analysts wrote that “Capex today is GPU revenue tomorrow,” framing the higher spending as a setup for future cloud-infrastructure sales as customers buy more graphics processing units, the chips used for AI workloads. (Barron’s)
Akamai sits in a crowded patch of the market where investors have been quick to punish margin pressure. Traders often bucket it with edge delivery and security names such as Cloudflare and Fastly, where growth is tied to internet traffic, security budgets and the cost of running large networks.
There is an obvious risk case. If memory costs keep climbing and customers resist price increases, Akamai could face a double hit — higher costs and slower demand — just as it ramps spending to build out capacity. Guidance also implies investors will be watching free cash flow closely, not just revenue.
Next up is execution: whether Akamai can pass through higher hardware costs without losing deals, and whether spending translates into faster cloud and security growth. The next hard checkpoint will be the company’s first-quarter performance for the period ending March 31, 2026, when investors expect an update on pricing, capex and margins.
