Akamai vs. Cloudflare: Which Is Better for Long-Term Holding, AKAM or NET?

Akamai possesses mature security products, enterprise clients, and a global delivery network, expanding its compute, storage, and AI inference services through the acquisition of Linode and the buildout of cloud infrastructure. Its AI platform covers CPU and GPU compute power, distributed inference, and AI security.

Cloudflare offers security, connectivity, and developer tools on a unified network. Workers AI provides pay-as-you-go model inference services, while AI Gateway manages analytics, caching, logging, security, and cost management for model calls.

Both companies benefit from the growth of AI applications, but their investment approaches differ. Akamai is expanding its owned compute power and data center capacity while absorbing the upfront capital expenditures required for its Anthropic contract; Cloudflare sells subscription and usage-based services via its global network and Workers platform while continuing to add GPUs, servers, and network resources.

Akamai's revenue for the second quarter of 2026 was $1.100 billion, up 5% year-over-year. Security revenue grew 10% to $604 million, cloud infrastructure services revenue rose 39% to $99.32 million, and delivery and other cloud application revenue fell 6%. GAAP operating margin dropped from 15% to 7%, and operating cash flow came in at $326 million.

During the same period, Cloudflare reported revenue of $696 million, a year-over-year increase of 36%, with remaining performance obligations rising 38% to $2.732 billion. Customers with over $100,000 in annualized revenue reached 4,698, accounting for 73% of total revenue.

Cloudflare's free cash flow for the quarter was $56.38 million. GAAP operating loss stood at $206 million, including $151 million in restructuring charges; non-GAAP operating income was $96.11 million, with an operating margin of 13.8%.

On September 24, Akamai announced that Anthropic has committed to purchasing $11.6 billion in cloud computing services over seven years, primarily supporting CPU workloads. The two parties can also add up to $9 billion in additional purchases, bringing the potential scale of cooperation to approximately $20 billion.

Fulfilling the initial contract is expected to require about $5.5 billion in capital expenditures, with an increase of roughly $1.7 billion in 2026. Akamai also granted stock warrants to Anthropic, which, if converted, would represent up to about 5% of its common stock. This contract expands the revenue stream for Akamai's cloud business while also increasing capital expenditures, execution risk, and potential equity dilution.

As of September 25, 2026, AKAM closed at $113.94 with a market capitalization of approximately $16.5 billion, while NET closed at $349.02 with a market capitalization of approximately $121 billion to $124 billion.

Based on a simple annualization of second-quarter revenue, the market cap-to-revenue ratios for AKAM and NET are approximately 3.7x and 43x to 45x, respectively. While this metric does not account for cash, debt, and seasonality, it reflects higher growth expectations assigned to Cloudflare by the market.

NET's advantage lies in its faster revenue growth and the continuous increase in enterprise customers and developers. The primary risks stem from high valuation, stock-based compensation, and margin pressure. The company has generated positive free cash flow, but its second-quarter free cash flow margin was only 8%, and it remains in a GAAP loss position.

AKAM has achieved GAAP profitability, generates strong operating cash flow, and trades at a valuation multiple significantly lower than NET. The Anthropic contract is expected to expand its cloud infrastructure business, but the project requires substantial capital outlay prior to revenue recognition, with returns contingent on facility delivery, contract margins, and the speed of cash recovery.

Investors who prioritize revenue growth rates and platform expansion capabilities and can tolerate higher valuation volatility may focus on evaluating NET; investors who place greater emphasis on existing profitability, operating cash flow, and lower valuation multiples may focus on AKAM.

If choosing only one, AKAM carries a lighter valuation burden, but the Anthropic contract will increase capital expenditures and potentially raise future customer concentration. NET is growing faster, but its current valuation demands that the company sustain high revenue growth while improving profitability.

The future performance of both companies will depend, respectively, on Akamai's execution of large contracts and whether Cloudflare can translate revenue growth into higher profits and free cash flow.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.