JPMorgan issued a company update on Akamai Technologies, Inc. (NASDAQ: AKAM) and reduced the earnings estimates of the content delivery networks company due to Apple Inc. (NASDAQ: AAPL)'s suspension of their web TV service. JPMorgan currently rates Akamai Technologies as Neutral with a $65 price target.
Sterling Auty, Hazal Mine Kansu and Darren Jue, analysts at JPMorgan wrote, “The recent updates in the content delivery space have not been favoring AKAM business [...] We expected Apple TV to be the next sustainable catalyst for CDN, but now that Apple suspended efforts on its web TV service we do not see any near-term catalysts on the horizon and are adjusting our estimates accordingly.”
Related Link: Akamai Releases Q3 2015 State Of The Internet Security Report
Akamai And Apple
According to of Investor’s Business Daily, Akamai was poised to take advantage of Apple’s web TV service by making large Internet investments to provide the key content delivery networks. However, reports have surfaced that Apple’s negotiations with media companies for a live streaming television service have stalled.
Apple is said to want to only the most popular channels from the major providers, which goes against the trend of content companies dictating what channels are included in each bundle. This news and uncertainty regarding the future of Apple TV calls into question the short-term health of Akamai’s business operations.
Akamai Technologies is currently trading at $51.99, up 0.35 percent. Apple Inc. is currently trading at $111.13, down 1.81 percent.
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