Akamai Technologies' (AKAM) outlook after transitioning from content delivery to cloud and security is reaching an inflection point, offsetting a forecasted 2% decline in the delivery business through 2027, Morgan Stanley said in a note Monday.

"Akamai is approaching an important inflection point in its long-term business model evolution that should enable better top-line growth and faster EPS growth in the years ahead," the note said

The company's security business is forecasted to grow at high single digits, and the cloud infrastructure segment is expected to grow by 40 to 45% exiting fiscal year 2025. Akamai's new AI product, the Inference Cloud, is expected to add further growth.

"We forecast a +7.7% CAGR in the Security business through 2027 to reach $2.60 billion in revenue or around 54% of our 2027 revenue estimate," the note said.

Morgan Stanley upgraded the stock to overweight from underweight and increased the price target from $83 to $115.

Akamai shares were more than 5% higher in recent trading.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

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