Cult Stocks: Akamai Is a Survivor

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Akamai Technology(AKAM) is a true child of the dot-com era. The Internet facilitator came public in November 1999 near $190, just four months before the tech bubble broke, triggering a historic bear market decline. This classic cult favorite still had time to double in price before that liquidity-fueled market fell off a cliff, hitting $345 on the first trading day of 2000.

Old-timers might recall this was just five days after PaineWebber equities analyst Walter Piecyk published his infamous $1,000 price target on Qualcomm(QCOM). Flash forward 10 years, and you'll notice a major difference between these two tech stocks. In a word, no one wants to own Qualcomm while just about everyone wants to own Akamai.

It's a major accomplishment for this issue to be trading at a three-year high in the middle of a major correction that has dropped most of the tech universe to considerably lower prices. This resilience reflects intense interest in the company at a time that speculative fervor for equities has dropped through the floor.

However, it's still foolish to assume this tech juggernaut will ever return to the glory days of 2000, when the Nasdaq 100 index was trading over 5000. But that shouldn't stop active investors who are still on the sidelines from taking a closer look at this market leader and seeing if it deserves a place their long-term portfolios.

What about short-term trading opportunities with Akamai? Is there upside or downside in this issue as we head into the historically tumultuous months of September and October? And, if you're already holding the stock, it is time to book a few profits? Or should you add more risk to a small position?