GET DAILY SIGNALSAkamai (AKAM) Falls -5.7% After Q3 Earnings Despite EPS Beat
Key Takeaways
- Akamai reported third quarter 2026 revenue of $1.12 billion, up 6.4% year over year and in line with consensus estimates.
- Adjusted (non-GAAP) earnings per share (EPS) reached $1.77, beating the analyst consensus of $1.67 by $0.10.
- Cloud Infrastructure Services revenue climbed 34% year over year to $109 million, while security revenue grew 9%.
- Fourth quarter and full-year 2026 guidance came in below Wall Street expectations, weighing on the stock after hours.
- Management highlighted more than $14 billion in multi-year cloud commitments signed so far in 2026.
- Shares fell roughly 5.7% immediately after the report as investors focused on the softer forward outlook.
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Why This Report Matters for Akamai's Shift
Akamai is navigating a deliberate pivot from its traditional content delivery business into faster-growing areas like security and cloud computing. The latest results provide an early look at how well the Cloud Infrastructure Services segment is scaling and whether it can offset slower growth elsewhere. Margins drew attention too, given the company's ongoing investments in AI-focused infrastructure. After a prior quarter of strong cloud gains, the question was whether that pace could continue without eroding profitability and whether guidance would align with the market's expectations.
The Quarter's Key Figures
Revenue for the third quarter came in at $1.12 billion, reflecting a 6.4% year-over-year increase that matched consensus. Adjusted EPS of $1.77 exceeded the $1.67 estimate by $0.10. GAAP net income reached $117.1 million, or $0.77 per diluted share. Cloud Infrastructure Services revenue jumped 34% to $109 million, and security revenue advanced 9%. The company has now secured more than $14 billion in multi-year cloud commitments for 2026. Adjusted EBITDA stood at $435.3 million for a 38.8% margin, roughly in line with forecasts.
Guidance introduced some caution. Fourth-quarter revenue is expected between $1.15 billion and $1.17 billion, below the $1.20 billion consensus, while EPS is projected at $1.50 to $1.70 versus the $1.78 estimate. Full-year revenue guidance of $4.44 billion to $4.47 billion and EPS of $6.47 to $6.68 also landed slightly below expectations. I also checked this using Tickeron’s AI Screener to compare the stock's metrics with peers.
How the Market Responded
Shares declined about 5.7% to $73.68 in after-hours trading despite the earnings beat. The softer guidance appeared to be the main driver. Operating margins fell to 9.7% from 15.7% a year earlier, and free cash flow turned negative at -$172.1 million amid higher capital spending on AI infrastructure. The stock had already faced pressure over the prior three months, indicating some softening in sentiment before the release.
Key Items to Track Ahead
The focus now shifts to converting those large cloud commitments into revenue, with management expecting contributions to begin in the fourth quarter of 2026 and reach roughly $2.2 billion annually by the end of 2028. Watching the pace of that ramp and any ongoing supply-chain delays will be important. Margin trends also merit attention, as AI-related spending has weighed on profitability and cash flow. The security business continues to provide steady growth, and sustained momentum there alongside cloud progress would support the overall transformation narrative.
Exploring Market Opportunities with AI Tools
When reviewing earnings like this one, I often turn to Tickeron’s AI Screener to quickly surface comparable setups across sectors. It lets me apply filters for patterns, fundamentals, and signals in a single scan, which helps put individual results in broader context without manual effort.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
AKAM sees its 50-day moving average cross bearishly below its 200-day moving average
The 50-day moving average for AKAM moved below the 200-day moving average on October 05, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on November 02, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on AKAM as a result. In 58 of 82 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 71%.
The Moving Average Convergence Divergence Histogram (MACD) for AKAM turned negative on November 03, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In 32 of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at 68%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AKAM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 66%.
The Aroon Indicator for AKAM entered a downward trend on October 29, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where AKAM's RSI Oscillator exited the oversold zone, 18 of 35 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 51%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a +6.48% 3-day Advance, the price is estimated to grow further. Considering data from situations where AKAM advanced for three days, in 204 of 336 cases, the price rose further within the following month. The odds of a continued upward trend are 61%.
AKAM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 25 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. AKAM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 66 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.601) is normal, around the industry mean (16.313). P/E Ratio (30.151) is within average values for comparable stocks, (57.744). Projected Growth (PEG Ratio) (1.177) is also within normal values, averaging (3.696). Dividend Yield (0.000) settles around the average of (0.312) among similar stocks. P/S Ratio (3.598) is also within normal values, averaging (104.492).
The Tickeron SMR rating for this company is 75 (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AKAM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 91, placing this stock worse than average.
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General Information
a provider of cloud services for delivering, optimizing and securing online content and business applications
Industry ComputerCommunications
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