Game-Changing Tech Stocks: Akamai (AKAM)
Akamai (AKAM) operates at the intersection of content delivery and network security, and has roughly 135,000 servers across the globe. These servers help its customers – including virtually all of the largest media and video-intense companies in the world like Yahoo (YHOO) , Facebook (FB) and Netflix (NFLX)– bring data faster to the users – people like you and me who are busy downloading videos and photos).
The company says its servers are located on what might be termed the “edge” of the Internet, which means that the servers are located physically close to end users. Since AKAM servers sit on the edge of the network and thus outside of corporate firewalls that are installed on premise or in the cloud, the Kona segment offers what can be thought of as a “first line” of defense against cyber attacks. Akamai can help deflect attacks before they ever make it to the corporate firewall.
This is a defensible niche for the company, given the size and scale of its server footprint and key customer base (comprised of many large companies, though no single customer makes up more than 10% of total revenues). That’s an attractive quality alongside a heavy focus in the fast-growing media segment and continued attention on cybersecurity.
Another reason I like Akamai is because it’s a relatively U.S.-centric tech play, as it gets 70% of its revenues domestically. That’s important in an environment where investors seem to be worried about international exposure and emerging markets.