Why Akamai Technologies Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Akamai Technologies (Nasdaq: AKAM  ) have soared today by as much as 24% after the company posted a solid second-quarter-earnings release.

So what: Revenue jumped 20% to $331 million, with adjusted net income of $78 million, or $0.43 per share. Those results easily topped the market's forecasts of $325.7 million in sales and $0.37 per share in adjusted profit. CEO Paul Sagan even said he hasn't "been this pleased in a long time."

Now what: Sagan attributed the results to adoption of Akamai's cloud infrastructure offerings and continued growth of its core content delivery business. The company also repurchased roughly 2 million shares during the quarter for $67 million. Jefferies and Dougherty & Co are out with bullish sentiments following the release, saying Akamai is early in its product cycles and stands to continue to benefit from Internet growth. Both firms rate Akamai a "buy" with a $43 price target.

Interested in more info on Akamai Technologies? Add it to your watchlist by clicking here.

Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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  • Report this Comment On July 26, 2012, at 10:54 PM, crca99 wrote:

    Insiders bought a bundle in recent weeks, so good performance shouldn't be surprising. Maybe they had an inkling.

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