A cloud computing stock is soaring more than 25%. Here’s what’s driving the rally

Akamai Technologies has seen a remarkable surge in its stock price, climbing over 25% in early trading on Friday. This spike follows the company's announcement of a substantial $1.8 billion partnership with an undisclosed AI firm, along with first-quarter earnings that met market expectations. The CEO of Akamai, Tom Leighton, revealed that the partnership involves a leading provider of frontier AI models, which has pledged significant investment over the next seven years for cloud infrastructure services. This collaboration underscores Akamai's commitment to enhancing its capabilities in the rapidly evolving AI landscape. In addition to the partnership news, Akamai reported a 6% increase in first-quarter revenue, surpassing the $1 billion mark. Notably, revenue from cloud infrastructure services skyrocketed by 40% to $95 million, while security revenue also saw an 11% rise, totaling $590 million. However, revenue from delivery and other cloud applications dipped by 7% to $389 million during the quarter. Looking ahead, Akamai forecasts second-quarter revenues between $1.08 billion and $1.1 billion, with adjusted net income per share expected to range from $1.45 to $1.65. The firm is strategically expanding its cloud infrastructure to accommodate the growing demand for AI workloads and is positioning itself among top competitors like OpenAI and Anthropic. Akamai's Chief Technology Officer, Robert Blumofe, highlighted the company's focus on three main pillars: content delivery, cybersecurity, and cloud infrastructure services. He noted that the cloud infrastructure segment, although currently the smallest, is the fastest-growing area of the business. Furthermore, Blumofe mentioned that Akamai operates an AI-driven inference cloud, which provides essential computing power and data storage for AI applications, with plans for further expansion to enhance network resource management.