Cisco, Akamai: Staying Optimistic On Video Streaming

Earlier in the year on CNBC I picked Cisco (CSCO) and Akamai (AKAM) as two stocks to benefit from the overall trend toward greater backbone bandwidth utilization for video. Well, I'm one for two.

While Cisco is now up 14.5% on the year, Akamai is down almost 33%, largely on price competition and higher capex, as Om points out here. Ouch, but I'll take my lumps. Sure, it helps that over the last few years since I first bought Akamai the stock is up .... oh, something like a factor of three. But I'd still rather the stock hadn't crumbled so badly at the end of the just-completed quarter.

So, do I dump the thesis? Nope. Matter of fact, while I haven't added more Cisco, I have bought a little more Akamai recently. I just don't accept the goofy argument that video streaming and consumption demand is flattening, and I think Akamai has a chance to be a CDN consolidator.

As always, feel free to argue me off the boat and back to solid land, or at least to Limelight (LLNW), etc.

CSCO vs. AKAM 1-yr chart:

Comments

[lodgegoat:]

No, you are IMHO on point with akam, and with the growth statement, online video is not flattening. we are just begining to see real online video and audio distribution here in the US and as important, globally. Most the traffic being done now is http downloads or progressive downloads. True streaming, live streaming of content is currently a small sector of the CDN world, but will continue to grow as well. open internet delivery of IPTV will take its place along with the walled garden approach of IPTV being done by telco and cable, that will require more service from such companies as AKAM.

2007 Aug 10 10:26 AM