Akamai: Buyback Bet in Streaming, IoT and the Cloud

08/12/2019 5:00 am EST

Focus: TECHNICAL

David Fried

Editor, The Buyback Letter

Akamai Technologies (AKAM) — which provides cloud services for delivering, optimizing and securing content and business applications over the Internet — is a new buyback recommendation, notes David Fried, editor of The Buyback Letter.

The company has more than 240,000 servers in over 130 countries, for uninterrupted customer experiences, the intelligence to optimize devices, and a capacity to move huge volumes of data and content, broadcasting to the largest audiences or personalizing for each individual user.

What does that all mean? Here’s a specific example that helps us understand: Earlier this year India’s largest premium streaming platform used Akamai Tech’s intelligent edge platform to live stream the VIVO IPL cricket tournament final to 18.6 million concurrent viewers, breaking records for concurrency.

It’s all about the IoT (Internet of Things). By 2025, some 22 billion connected devices will be sending data across the Internet. In addition, billions of application instances will be sending trillions of messages, and these endpoints are both huge opportunities and challenges for businesses to harness, distribute and protect the data.

Every industry is affected, from car makers to hotel operators. Nearly every industry is incorporating endpoints in the form of connected devices and applications into their business strategies to capitalize on the ubiquity of Internet access.

But building and managing the infrastructure required to support, scale and secure these experiences can be incredibly time, cost and resource intensive for organizations and not a part of their core competency.

For the fiscal year ending December 2019, AKAM is expected to earn $4.17 per share, a change of 15.2% from the year-ago reported number.

The CEO attributes this outperformance to the continued strong growth of their security business, strong traffic growth from the media business and the company’s ability to improve efficiency while continuing to invest for future growth. Shares outstanding have been reduced by 3.829% in the last 12 months.

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