Shares of Akamai Technologies jumped 24% in extended trading Thursday after the company announced a $1.8 billion long-term cloud deal with an unnamed frontier model provider.
The surge came even as Akamai issued a weaker-than-expected second-quarter outlook. The company forecasts revenue between $1.08 billion and $1.10 billion, just below the $1.10 billion analyst consensus, and adjusted earnings per share of $1.45 to $1.65, short of the $1.68 expected.
CEO Tom Leighton attributed the cautious guidance to rising costs for memory infrastructure components like CPUs and GPUs amid surging demand. "There's some component prices that have gone up quite a bit in response to the increased demand," Leighton said, adding that Akamai is well-positioned to secure the necessary hardware.
For the first quarter, Akamai reported revenue of $1.07 billion, matching expectations, though earnings per share fell to $0.71 from $0.82 a year ago.
The market focused on the massive cloud contract, overshadowing the downbeat near-term numbers.