The #1 Tech Stock of the Decade
The coronavirus has completely transformed our global economy… how we work, how we interact and how we consume.
More people are online than ever before. Home internet bandwidth usage has skyrocketed.
When the COVID-19 lockdown began, internet activity shot up by 25% in a matter of days. Total traffic surged by up to 70%. Demand for videoconferencing was up by 240% in a matter of weeks.
And experts say this trend is going to continue in the years ahead.
It’s why I believe one small Arizona-based company is poised to become the “gatekeeper of the entire internet.”
It will be the most important tech company of the coming decade.
Stepping Into the Limelight
While COVID-19 has been a disaster for many American businesses, Limelight Networks (Nasdaq: LLNW) has seen its user base surge.
Based in Scottsdale, Arizona, Limelight is a leading provider of digital content delivery, video, cloud security and edge computing services.
The company specializes in systems, services and software that optimize internet devices and web applications. Its products reduce delays and lessen bandwidth usage.
In essence, Limelight provides the internal workings that make rapid and clear internet connections possible.
It’s quite likely that you’re using the company’s technology right now… to read this report.
As the coronavirus pandemic drags on, many of us are spending more time at home and indoors – and the increased usage of the internet is straining its underlying infrastructure.
You see, offices have “enterprise-grade” internet service.
It’s specially built to withstand the high levels of bandwidth that come with doing business.
Home internet service, on the other hand, is built to accommodate less bandwidth-intensive activities, like watching Netflix or reading the news.
It’s simply not equipped to handle the surge in internet traffic this crisis is bringing about. Bottlenecks, delays and shoddy connections are irritating individuals and frustrating businesses.
That’s why more and more companies are turning to Limelight for help.
The Unstoppable Trend… and the Company Behind It
Unlike most content delivery networks, Limelight’s high-capacity private fiber backbone bypasses the unreliable public internet when delivering content to its internet service providers (ISPs) around the world.
With complete control over routing from the content source to the user’s ISP, Limelight eliminates many common bottlenecks in the content delivery process, providing lightning-fast service and broadcast-quality connections.
It has exposure to 5G, the Internet of Things, cloud computing and numerous other sectors pegged to explode soon.
Limelight’s a key player in the streaming video market, a segment of the internet market that has grown fifteenfold from 2016 to 2021. That’s a compound annual growth rate of 71.99%, and it’s showing no signs of slowing down at all.
A Company With a Vision
Several years ago, Limelight’s management bet that fixed-point transmission of data (where data is transmitted to a data center) would become less critical.
Management believed that multiple device connections leveraging the cloud would be where the market would head next.
That vision proved to be absolutely spot-on!
The company is now a leading provider of edge cloud services. In edge computing, data is processed by the device itself or by a local computer or server, rather than being transmitted to a data center.
Limelight’s products improve connectivity, reduce delays and lessen bandwidth usage.
Since its humble beginnings back in 2001, Limelight has partnered with nearly 700 companies and has developed a presence in 50 countries.
Its list of customers reads like a who’s who of the entertainment and social media world: Roku, DirecTV, BBC, Marvel, Tencent Holdings, Disney, Cinedigm, CBS, Starz, Universal Pictures, Amazon, ESPN and many others.
The company has grown quickly since January 2019. Today, Limelight has 135 points of presence worldwide.
But the company isn’t anywhere near done. Limelight is planning on expanding its presence in Germany, Saudi Arabia and India. It’s also planning on expanding into Ecuador to enhance its position in South America.
Over the course of 2019, Limelight improved efficiency with software innovation and new server technology. That has come in handy as the company has innovated and seized upon the market opportunity presented to it by COVID-19 in 2020 and 2021. Today, it can provide 95-plus terabytes per second in a 100 Gigabit Ethernet.
Limelight’s next-generation servers, for example, increase the average amount of data delivered per unit of power by almost 80%, providing increased capacity and reliability for customers.
It’s Time
As I mentioned earlier, Limelight’s biggest growth market potential is real-time streaming.
As people increasingly choose live online content, one of the primary complaints with watching live sports and other real-time events is the delay – called latency in industry jargon – between the live event and the online stream.
This lag time, or latency, refers to the time it takes for a device to send information to a server and then receive a response back.
A lower latency opens the door for real-time, almost instantaneous interaction between technology, allowing a server on the other side of the country – or even the world – to operate a machine as if it’s directly connected to the device.
Limelight Realtime Streaming provides subsecond live streaming latency… meaning lag time is less than a second!
It’s the first scalable solution that delivers live broadcast-quality video from anywhere in the world with less than one second of latency.
Now, you and I might not care about a one-minute delay while watching a live pay-per-view concert… but to certain businesses, the lowest possible latency is critical…
- Global esports: According to Statista, market revenue will reach $1.6 billion in 2024.
- Online gambling: The global online gambling market is anticipated to be valued at more than $112 billion in 2025.
- Global media and entertainment market: The entire worldwide market is projected to grow from an estimated $1.39 trillion in 2011 to $2.5 trillion by 2024.
And I haven’t even touched on its demand and uses for lower latency in video security, medical imaging and autonomous vehicles.
Then there’s the granddaddy of them all, the opportunities created by the Internet of Things… which is projected to grow to 75 billion connected devices by 2025.
The Invisible 800-Pound Gorilla
By now, you might be asking yourself, “Why haven’t I ever heard of Limelight?”
The answer is simple. Limelight doesn’t sell to consumers. It’s a business-to-business company.
It’s working behind the scenes… letting its customers take the credit.
It’s selling the internal operational software that allows ISPs to function. Limelight provides the network backbone that is connected to approximately 1,000 ISP networks, including Chrome, Safari, Firefox and Opera.
Limelight provides content delivery and related services in North America, South America, Europe, the Middle East, Africa and Asia.
Its customers operate in the television, music, radio, newspaper, magazine, movie, gaming, software, technology, retail and social media industries.
I’ve already told you about some of Limelight’s clients…
But I haven’t even mentioned some of its biggest and most recognizable customers.
Limelight has agreements with Google and Microsoft that provide Limelight’s content delivery capabilities to their cloud platform customers.
In late 2018, Limelight signed a key partnership with Swedish communications giant Ericsson to be the exclusive provider of content delivery capability on Ericsson’s edge cloud platform.
This partnership should be a critical growth driver going forward.
The agreement, which includes all existing and future Ericsson clients, is expected to – within the next few years – more than double Limelight’s global delivery footprint.
And last, but certainly not least, is Limelight’s largest customer… Amazon.
The online retail goliath accounts for about 30% of revenue. Four years ago, Amazon was less than 10% of Limelight’s business.
And I wouldn’t rule out the possibility of Amazon acquiring Limelight…
Business Is Booming
Even before COVID-19 struck and drove hundreds of millions of people online to work, play and socialize… Limelight was already on the upswing!
The company’s revenue surged tenfold from $21 million in 2005 to $230 million in 2020.
From 2014 to 2019, the company’s revenue from the Europe, Middle East and Africa region doubled. From 2019 to 2020, the region increased revenue by 15%.
Revenue from the Asia-Pacific region grew by 16.8% from 2019 to 2020. However, the Americas remain Limelight’s largest market. In that region, the company’s revenue shot up 13% from 2019 to 2020 for a total of $142.3 million.
I expect Limelight’s revenue to shoot up to $239 million in 2022, growing all the way to $309 million by 2025.
This company’s leaders understand what’s happening in the world. They have a terrific opportunity with the bandwidth crunch that’s been occurring.
The Smart Money Choice
The smart money – that’s the capital controlled by institutional investors, market mavens and hedge funds – sees what’s on the horizon.
State Street Corporation bought 981,570 shares, and Deutsche Bank picked up 323,490 shares. Goldman Sachs also recently increased its position by 624,804 shares.
When the smart money gives its vote of confidence, that’s a great sign for the prospects of the stock.
Many more businesses and media providers will certainly start adding Limelight-backed networks to their toolboxes as America gets accustomed to working off-site and using streaming content.
The smart money knows it… and now you should too.
I wouldn’t wait too long to buy this one. It won’t be selling for $2 and change for much longer.
