Akamai Technologies (AKAM) shares soared 3.2% in the last trading session to close at $113.94. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.8% loss over the past four weeks.
The uptrend was largely driven by an $11.6 billion deal secured by AKAM from Anthropic to support the latter’s accelerating CPU workload demands by leveraging Akamai Cloud's distributed AI infrastructure and software. This seven-year deal underscores a growing demand for Akamai to enable customers to build, deploy and operate AI workloads at scale.
This cloud services provider is expected to post quarterly earnings of $1.69 per share in its upcoming report, which represents a year-over-year change of -9.1%. Revenues are expected to be $1.12 billion, up 6.2% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Akamai Technologies, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on AKAM going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Akamai Technologies is a member of the Zacks Internet - Services industry. One other stock in the same industry, Autohome Inc. (ATHM), finished the last trading session 0.1% higher at $21.33. ATHM has returned -5.5% over the past month.
Autohome's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.39. Compared to the company's year-ago EPS, this represents a change of -18.8%. Autohome currently boasts a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).