Feb 19 (Reuters) – Akamai Technologies forecast first-quarter adjusted profit below Wall Street estimates on Thursday, signaling that the ongoing memory supply squeeze will increase costs, sending its shares down nearly 9% after the bell.
The rapid build-out of artificial intelligence infrastructure by big tech firms has absorbed much of the world’s memory chip supply, lifting prices as manufacturers prioritize components for higher-margin data centers over consumer devices.
CEO Tom Leighton told Reuters in an interview that Akamai is also experiencing higher memory costs and might have to pass some of that on to customers.
“We’re probably going to look at some increase in prices. The cost of memory has probably doubled over the last couple of months and we are seeing increased costs in the marketplace. Some of that we will need to pass on,” Leighton said, adding that Akamai would be very careful while doing so.
The company expects adjusted profit per share between $1.50 and $1.67 in the first quarter, below analysts’ average estimate of $1.75, according to data compiled by LSEG.
However, Akamai forecast better-than-expected 2026 revenue at $4.40 billion to $4.55 billion, the midpoint of which is ahead of an estimate of $4.42 billion.
The Cambridge, Massachusetts-based company is capitalizing on demand in the security and compute segments, as enterprises prioritize securing applications and web infrastructure while transitioning to cloud environments.
For the fourth quarter ended December 31, Akamai posted revenue of $1.10 billion, beating an estimate of $1.08 billion.
On an adjusted basis, Akamai posted quarterly earnings of $1.84 per share, compared with an estimate of $1.76 per share.
(Reporting by Juby Babu in Mexico City; Editing by Jonathan Ananda)
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