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Akamai Technologies (NASDAQ:AKAM) plunged 8% on Wednesday after it reported fourth-quarter results slightly below estimates.
For the period ending Dec. 31, Akamai earned $1.69 per share on $995M. Analysts had expected the company to earn $1.60 per share on $990.3M in revenue.
However, its guidance for the quarter in progress of $995M was above the market consensus of $993.5M. Expected earnings per share of $1.59 to $1.64 were above the $1.60 per share consensus.
The cloud computing, cybersecurity company also announced plans on Tuesday to embed cloud computing capabilities into its edge network. It has been conducting early trials of its “generalized edge compute,” dubbed Gecko, with several of its enterprise customers.
“AKAM plans to have 10 Gecko architected regions by the end of Q1, with hundreds more over the next several years,” wrote Baird Equity Research. “Customers in AI inferencing, multi-player gaming and social and streaming media could be early use cases.”
Baird raised its Akamai price target to $128 from $120 following what it considered a solid outlook.
“Akamai’s new initiative, codenamed Gecko … combines the computing power of our cloud platform with the proximity and efficiency of the edge to put workloads closer to users than any other cloud provider,” said Akamai CEO Tom Leighton.
While traditional cloud providers support virtual machines to a small number of core data centers, “Gecko is designed to extend this capability to our edge pops, bringing full stack computing power to hundreds of previously hard-to-reach locations,” Leighton added.
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