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Akamai Stock Dips on Rising Memory Costs
20 Feb
Summary
- Akamai forecasts Q1 profit below estimates due to rising memory costs.
- AI infrastructure build-out is driving up memory chip prices.
- The company expects 2026 revenue to exceed analyst expectations.
Akamai Technologies issued a first-quarter adjusted profit forecast that fell below analyst expectations on Thursday. This projection was attributed to the ongoing squeeze in memory chip supply, which is driving up costs for the company.
Big tech firms' rapid expansion of artificial intelligence infrastructure has significantly impacted the global memory chip supply. Manufacturers are now prioritizing components for higher-margin data centers, leading to increased prices and affecting availability for consumer devices.
CEO Tom Leighton indicated that Akamai is experiencing these elevated memory costs and may need to pass some of them on to customers. He stated that memory costs have likely doubled recently, and while the company aims to be cautious, price increases are probable.
Despite the near-term profit concerns, Akamai provided a more optimistic outlook for 2026 revenue, forecasting between $4.40 billion and $4.55 billion, exceeding the consensus estimate. The company is leveraging demand in its security and compute segments, as enterprises focus on securing applications and migrating to cloud environments.
