On Thursday, Baird, a financial services firm, upgraded Akamai Technologies (NASDAQ:AKAM)' stock from Neutral to Outperform and increased its price target from $128.00 to $135.00. The firm expressed optimism about Akamai's growing security segment, citing it as a primary reason for the upgrade.
Akamai Technologies, listed on NASDAQ:AKAM, has recently experienced a dip in its stock price, which Baird sees as an opportunity for investors. The firm highlighted that Akamai's valuation is currently below its five- and ten-year averages. This, combined with the company's increasing focus on cloud security—which is expected to account for 50% of Akamai's total revenue in 2024, up from 39% three years prior—presents what Baird considers an attractive risk/reward scenario for potential shareholders.
Despite the challenges faced by Akamai in its delivery business, Baird believes these issues are already well recognized by the market. The firm suggests that the compute sector could offer potential upside in the years beyond 2024, particularly as investor expectations remain low for this segment of Akamai's business.
Baird's statement emphasized the firm's confidence in Akamai's prospects, encouraging investment at the current stock levels. The upgrade and revised price target reflect Baird's view of Akamai's potential for growth, particularly within the cloud security market.
The revised price target of $135.00 represents Baird's expectation for Akamai's stock performance going forward, adjusting for the company's strategic focus on security services and market conditions that could influence the stock's value.
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