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Akamai’s Billion-Dollar Breakthrough: Is This a New Era for Security and Cloud?

Matt MonacoAvatar
Written by Matt Monaco Reviewed by Jack Kellogg Fact-checked by Tim Sykes
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Akamai Technologies Inc.’s stocks have been bolstered by the recent headlines highlighting strong quarterly earnings and a new strategic partnership with a leading telecommunications firm. On Monday, Akamai Technologies Inc.’s stocks have been trading up by 4.16 percent.

Winning Court Approval for Edgio Acquisition

  • Court approval has been granted for acquiring select assets from Edgio, expected to enrich Akamai’s offerings and potentially boost Q4 revenue by $9M-$11M.

Candlestick Chart

Live Update At 15:39:08 EST: On Monday, December 02, 2024 Akamai Technologies Inc. stock [NASDAQ: AKAM] is trending up by 4.16%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • The acquisition includes valuable customer contracts and patents from Edgio, projected to add significant revenue of $80M-$100M in FY25.

  • Akamai aims to capitalize on the acquired assets to enhance its cybersecurity and cloud computing portfolio, targeting considerable growth in upcoming fiscal years.

Understanding Akamai’s Financial Footing

As millionaire penny stock trader and teacher Tim Sykes, says, “Small gains add up over time; focus on building wealth gradually, not chasing jackpots.” Many traders often feel the urge to make big, quick profits by placing large bets on volatile stocks, hoping to hit the jackpot. However, successful trading requires patience and consistent effort rather than chasing large, risky trades. It’s crucial for traders to concentrate on making small, steady profits that accumulate over time, understanding that this approach reduces the chance of significant losses and promotes sustainable growth in the long run.

With a freshly minted quarterly revenue surpassing $1B, Akamai Technologies is entering a promising phase. For those unfamiliar with financial jargon, hitting a billion means big business, especially in their primary areas of cloud computing and security, which have seen a 17% year-over-year boost. This spike now makes up nearly 70% of the firm’s entire income—a massive chunk!

Their net earnings per share were right on the money with analyst predictions, which keeps investors happy and analysts satisfied as they compare these figures to past performances. Visualize it this way: imagine Akamai’s financial health as a fast train where every compartment (or revenue segment) is reeling in solid numbers, especially the security and cloud services that have grown impressively and continue to drive their business forward.

Yet, not all is glitz and sunlight. The company faces hurdles, notably in its delivery wing. This part of the business, vital for getting digital assets from point A to B over the web, isn’t moving fast enough. Traffic in this sphere is, frankly, underwhelming and might be sluggish until year’s close. It’s like trying to climb a mountain with a group of tired hikers slowing the pace. However, top analysts from Baird and Susquehanna maintain positive attitudes about these segments, hinting that Akamai’s stronghold in cloud and security could balance the dips in delivery.

More Breaking News

What Does the News Mean for Akamai?

The decision to acquire Edgio’s assets is significant. Such moves are often complex, akin to buying a piece that perfectly fits into an ever-evolving puzzle. For those who don’t dabble in buying companies daily, think of it like acquiring a special ingredient for a recipe—missing it just makes the dish incomplete. This acquisition aligns with Akamai’s mission to bolster its security measures, expanding their already noteworthy portfolio in an attempted jolt to market dominance.

Additionally, Akamai’s technological edge extends further with a groundbreaking collaboration. Picture Akamai’s team reaching its peak collaboration phase alongside Edgio’s patents, pushing the envelope in their cloud and cybersecurity areas. This venture not only promises directed revenue influx but aims at a solidification of their long-standing tech forte.

In essence, Akamai is successfully setting the stage for anticipated growth, yet keeping an eye out on those original components like delivery, which demand cultivation and care.

Concluding Thought

Akamai Technologies seems to ride on a promising track with ambitious goals. With critical acquisitions and consistent performances, particularly in cloud and security, they could redefine their position in the tech vista. However, continuous evaluations of market sentiments based on their underlying assets and secure execution of business strategies will decide how brightly Akamai can shine. Financially, it’s a ride worth watching. As millionaire penny stock trader and teacher Tim Sykes says, “Be patient, don’t force trades, and let the perfect setups come to you.” Traders are reminded to stay cautious and informed.

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The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”