Akamai Technologies looks more and more like a serious artificial-intelligence play, Bank of America said in a bullish upgrade that sent the stock soaring Wednesday to a 26-year record.

Analyst Tal Liani upgraded Akamai to Buy from Neutral, hiking his stock price target to $175 from $130. That price target represents 8% upside.

Akamai stock jumped 7.7% to $161.14, making it one of the top performers in the S&P 500 during Wednesday's session. Shares of the cloud computing company also hit their highest close since March 29, 2000, when they closed at $170, according to Dow Jones Market Data.

At the heart of the upgrade is a $1.8 billion deal that makes Akamai a more established AI infrastructure company.

Last week, Akamai said a "leading frontier model provider" has committed $1.8 billion for its cloud infrastructure services, a sign that the AI wave continues to bolster its business. Bloomberg later reported that the $1.8 billion deal is with AI-startup Anthropic. Both companies declined to comment to Barron's at the time.

Liani expects the deal to add $20-25 million in revenue per quarter starting in the fourth quarter.

"The story has shifted from a legacy delivery network to a credible AI infrastructure platform," Liani wrote Wednesday. "Large cloud infrastructure wins, including a $1.8 billion, 7-year deal, signal real demand for distributed AI, not just narrative."

Liani added that Akamai's cloud infrastructure services, or CIS, segment is at an inflection point with "momentum supported by AI workloads and edge inference use cases."

The stock has gained 57% in May, part of an 86% advance this year. However, Akamai shares remain 51% below their record closing high of $327.62 from Dec. 31, 1999.

Bank of America also now expects Akamai's annual profit to accelerate based on its improved position in the AI marketplace. Risks, however, include debates on the durability of the company's CIS growth and how it can remain competitive against hyperscalers.

Akamai also reported better-than-expected first-quarter results last week and boosted the lower end of its guidance range for full-year earnings.

But Morgan Stanley analysts wrote Friday that the earnings report was overshadowed by the $1.8 billion deal, the largest in Akamai's history. That's because the deal sends signals to investors the company is firmly entrenched in the AI narrative, they noted. They have an Overweight rating on the stock.

Bank of America and Morgan Stanley aren't alone in their bullish view of Akamai. Of the 29 analysts polled by FactSet, Akamai has an average Overweight rating with a $155.46 price target.