New York, Feb 20, 2026, 11:23 (EST) — Regular session
- Akamai shares are under pressure, dropping after the company’s latest outlook pointed to rising memory costs.
- The company’s putting its weight behind security and cloud computing expansion, though short-term profit faces some heat.
- Eyes are on pricing shifts, capex plans, and whatever signals emerge for other players in edge delivery and security.
Akamai Technologies plunged over 9% Friday morning, deepening its slide after earnings as Wall Street reacted to a softer first-quarter profit forecast despite healthy revenue gains. Shares traded at $99.38, down 9.3% from Thursday’s $109.59 close.
The crunch is coming from memory. Akamai CEO Tom Leighton told Reuters memory costs have shot up, saying prices have “probably doubled” just in the last couple of months. He flagged artificial intelligence infrastructure as the culprit, noting the AI build-out is eating up available memory chip supply. Leighton said some of those higher costs might have to be passed along. Reuters
Akamai is projecting first-quarter non-GAAP earnings per share in the $1.50 to $1.67 range, with revenue expected between $1.06 billion and $1.085 billion. Looking ahead to 2026, the company’s forecast calls for revenue of $4.4 billion to $4.55 billion and capital expenditures at a hefty 23% to 26% of revenue—an aggressive outlay for a business focused on network, security, and cloud services.
Akamai turned in fourth-quarter revenue of $1.095 billion late Thursday, marking a 7% increase from the same period a year ago. Non-GAAP earnings per share came in at $1.84. Security revenue landed at $592 million, up 11%. Cloud Infrastructure Services, which includes compute and storage, jumped 45% to $94 million, the company said in its release.
Leighton noted the company’s faster-growing segments are shouldering more of the load now. He highlighted “strong customer interest” in Akamai Inference Cloud, with AI-fueled demand driving additional compute to the edge. Yahoo Finance
Some analysts chalked up the selloff to timing rather than a shift in direction. KeyBanc analysts summed it up: “Capex today is GPU revenue tomorrow.” They see the increased spending as laying the groundwork for more cloud-infrastructure sales—customers will need more graphics processing units for AI, after all. Barron’s
Akamai finds itself in a busy corner of the market, a spot where margin squeezes tend to draw sharp reactions from investors. Traders usually group the company with edge delivery and security players—think Cloudflare and Fastly. For these names, growth moves alongside shifts in internet traffic, security spending, and the hefty bills that come with operating vast networks.
The risk is clear enough: if memory prices keep rising while customers push back on hikes, Akamai could get squeezed on both sides—costs jump, demand softens. All this, right as the company pours more into expanding capacity. Guidance suggests one thing for shareholders: free cash flow is about to get more attention, not just the topline.
Now comes the execution test: Can Akamai push through those higher hardware costs and still keep business? Investors also want to see if the extra spending will actually accelerate growth in cloud and security. The big milestone to watch is first-quarter results for the period ending March 31, 2026—investors will be looking for new details on pricing, capital expenditures, and margins at that point.
