Akamai Technologies shares soared more than 23% in premarket trading Friday after the company announced a multibillion-dollar cloud computing agreement with artificial intelligence firm Anthropic, highlighting the growing demand for computing capacity as AI developers expand their workloads.
The agreement requires Anthropic to pay Akamai $11.6 billion over seven years for access to CPU capabilities from Akamai Cloud’s distributed AI infrastructure and software.
Akamai said the deal also includes an option for the two companies to expand the arrangement by another $9 billion, taking the potential total commitment to roughly $20 billion.
The announcement sent Akamai shares sharply higher after Thursday’s close and prompted several Wall Street analysts to raise their price targets on the stock.
Anthropic deal reshapes Akamai’s AI outlook
The new commitment adds to more than $2.8 billion in existing multiyear cloud commitments across Akamai’s customer base announced this year.
JPMorgan analysts said the additional $9 billion option could follow “a path of low resistance” toward being exercised, underscoring the potential scale of Anthropic’s future computing requirements.
Anthropic will also receive warrants as part of the agreement.
Akamai is granting warrants representing up to 5% of its shares outstanding, with an exercise price of $111.33, close to the stock’s Thursday closing price.
The structure gives Anthropic the right, but not the obligation, to purchase Akamai shares at a predetermined price in the future.
For Akamai, however, the deal comes with substantial upfront investment requirements before the associated revenue begins flowing through.
The company expects no revenue contribution from the agreement this year, followed by approximately $150 million to $300 million in 2027.
Revenue is expected to continue ramping thereafter, eventually reaching about $1.7 billion annually.
Heavy capital spending needed to scale
Akamai expects to spend approximately $5.5 billion in capital expenditure to support the agreement, including $1.7 billion this year.
The investment requirement has raised questions about whether the company will need to access additional financing next year.
JPMorgan analysts flagged the possibility, while Akamai CFO Edward McGowan did not rule out additional capital needs during a call with analysts.
McGowan pointed to Akamai’s $4.6 billion in cash and another $1 billion available through lending commitments from banks.
“If we need additional capital, we’ll certainly have a discussion with our board and with our senior management team and do what we think is best for shareholders overall,” he said.
The upfront spending also means the near-term financial impact will differ significantly from the eventual revenue contribution, making the pace of infrastructure deployment and customer utilization important factors for investors.
Morgan Stanley analysts estimate that operating margins on the Anthropic deal will be about 30%.
They also highlighted Akamai’s use of CPUs rather than GPUs as a potential advantage because CPUs generally have lower power requirements.
The analysts described this as “a dynamic that is not well-understood by the market when it comes to running AI workloads.”
AI inference business expands rapidly
The Anthropic agreement comes as Akamai’s cloud infrastructure business is already experiencing rapid growth.
Cloud Infrastructure Services revenue increased 39% year over year to $99.3 million in the second quarter from $71.5 million a year earlier.
Akamai attributed the increase to demand for AI infrastructure, higher GPU deployments and continued adoption of its distributed cloud platform.
KeyBanc analysts pointed to the acceleration in Akamai’s AI inference business, describing its growth as “unthinkable.”
The business had started with 2 to 5 megawatts of commitments in October 2025 and has since expanded to between 95 and 105 megawatts, according to the firm.
Akamai expects third-quarter revenue of between $1.105 billion and $1.13 billion, alongside a non-GAAP operating margin of 24% to 26%.
The Anthropic agreement could therefore materially alter the longer-term trajectory of the cloud infrastructure business, although the timing of the revenue ramp and the associated capital requirements remain key considerations.
Analysts lift targets but flag risks
Guggenheim raised its price target on Akamai to $225 from $190 while maintaining a Buy rating after the contract announcement.
The new target represents more than 100% upside from Thursday’s closing price.
The firm said the agreement should be profitable, although margins would remain below Akamai’s typical core business margins.
Guggenheim based the higher target on stronger projections for the outer years.
Evercore ISI reiterated an Outperform rating and a $175 price target, while UBS raised its target to $148 from $143 and retained a Neutral rating.
UBS analyst Roger Boyd said the contract could provide additional upside to Akamai’s low-teens fiscal 2027 growth guidance.
However, he also noted that the benefit could be offset by pressure on margins and free cash flow as the multiyear contracts ramp up.
TD Cowen raised its price target to $149 from $140 while maintaining a Hold rating.
Compute scarcity remains central to AI infrastructure
TD Cowen said the contract highlights the continued scarcity of computing capacity in the current AI infrastructure cycle.
Frontier AI model developers are competing for access to compute, creating opportunities for alternative infrastructure providers such as Akamai.
The firm said this allows companies such as Akamai to participate in workloads that historically would have been handled by hyperscale cloud providers or through direct leasing arrangements.
At the same time, TD Cowen remains cautious about the long-term durability of Akamai’s cloud infrastructure model.
The firm said much of the current demand appears to be driven by an acute shortage of available compute rather than permanent differentiation in infrastructure.
Anthropic’s continued growth, according to TD Cowen, appears increasingly constrained by access to computing capacity.
That shortage provides a favorable backdrop for vendors capable of delivering large blocks of infrastructure.
For Akamai, the key question now is whether the current AI-driven demand for alternative compute capacity develops into a durable business opportunity as the industry expands beyond its present infrastructure constraints.
The post Akamai stock surges 23% on $12B Anthropic AI cloud deal: why it could double appeared first on Invezz