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Akamai Tech: Eliminating traffic jams on the information superhighway

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Some investors/readers probably are not aware that the internet -- critical as it is today for commercial activities and the flow of information -- was not designed to handle the volume and complexity of today's web tasks. Moreover, the appearance of internet traffic jams created an opportunity for Akamai Technologies.

Akamai Technologies (NASDAQ: AKAM) solutions accelerate and improve the delivery of internet content and applications.

Analysts like Akamai's broad 1,800-member customer base, including many blue-chip companies. Further, analysts also like the fact that AKAM has continued to deliver material revenue increases and earnings gains, despite expansion/infrastructure investments.

Further, the consensus among analysts is that 28,000-server Akamai will continue to have a competitive advantage in its key business segments for at least the next two years. The Reuters F2008/F2009 EPS consensus estimates for AKAM are $1.68/$2.04.


The risks? Analysts are keeping an eye on Akamai's convertible debt, as well as on technological change in the sector.

The First Call mean rating for AKAM is: Buy [25 firms]. Mean 2008 target: $43 [high: $60, low: $32].

Stock Analysis: Akamai Technologies is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from AKAM's shares. Sell/Stop Loss if you were to purchase shares in this company: $17.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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Last updated: November 11, 2009: 12:20 PM

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