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Globe and Mail
38 minutes ago
- Globe and Mail
Where Will Arista Networks Be in 1 Year?
Key Points Arista is benefiting from the rapid growth of the cloud and AI markets. But its dependence on big hyperscale customers is squeezing its gross margins. A lot of of its near-term growth is already baked into its premium valuations. 10 stocks we like better than Arista Networks › Arista Networks ' (NYSE: ANET) stock has rallied more than 50% over the past 12 months. It also trades less than 10% below its all-time high from this January. The computer networking company impressed investors with its robust growth rates and exposure to the booming cloud and AI markets. But will Arista's stock soar even higher over the next year, or is it due to take a breather? Let's review Arista's growth rates, its near-term catalysts, and its valuations to decide. Understanding Arista's business Arista controls a smaller slice of the networking market than Cisco Systems, but it differentiates itself from its bigger competitor in several key ways. Arista's modular operating system, EOS, is compatible with a wider range of open networking protocols than Cisco's systems, which are often known for locking its customers into its "walled garden." In addition, Arista focuses on selling lower-latency switches, which are optimized for hyperscale cloud networks, while Cisco bundles together a broader range of enterprise campus, branch, wide-area networking (WAN), and data center solutions. Arista's flexibility and scalability made it the preferred networking hardware and software provider for cloud and AI giants like Meta Platforms and Microsoft. Its CloudVision platform also helps those clients easily monitor and analyze their data center deployments. So while Cisco is still considered a "one stop shop" for big enterprise networking deployments, Arista is emerging as a higher-growth play on the expanding cloud and AI markets. From 2019 to 2024, Arista's revenue expanded at a compound annual growth rate (CAGR) of 24%. Its cloud and hyperscale markets continued to expand throughout the pandemic, and its tighter portfolio of products insulated it from the supply chain disruptions which impacted Cisco and other networking hardware companies. What happened to Arista over the past year? In 2025, Arista's revenue rose 19.5%, its adjusted gross margin rose 200 basis points to 64.6%, and its adjusted earnings per share (EPS) grew 31.2%. Here's how rapidly it grew over the past year. Data source: Arista Networks. YOY = Year over year. Arista's recent growth was largely driven by the rapid expansion of the cloud and AI markets. However, its gross margins are declining as it sells a higher mix of lower-margin, high-volume routers and switches to those big customers. It doesn't have much pricing power against those cloud titans, which often demand higher-volume discounts. At the same time, inflation, elevated interest rates, tariffs, and other macroheadwinds are driving its component and supply chain costs higher. By comparison, Cisco's adjusted gross margin expanded 30 basis points year over year to 68.6% in its latest quarter. Those higher margins reflect Cisco's stronger pricing power, which it reinforces through its aggressive bundling strategies. For the second quarter of 2025, Arista expects its revenue to rise 24.3% year over year as its adjusted gross margin dips to 63%. For the full year, analysts expect its revenue and adjusted EPS to grow 20% and 13%, respectively. Most of that growth should be driven by the growing adoption of its 800G Ethernet products for handling AI workloads. Where will Arista's stock be in a year? Arista is still growing rapidly, but it can't be considered a bargain at 50 times its trailing earnings. Cisco, which is growing at a much slower rate, trades at 28 times earnings. For 2026, analysts expect Arista's revenue and adjusted EPS to grow 18% and 17%, respectively, as the AI boom continues. If Arista matches those estimates and still trades at 50 times earnings, its stock price could rise more than 20% to $150 over the next 12 months. But if it trades at 30 times earnings, its stock could drop more than 25% to $90. Therefore, Arista's upside potential might be limited by its valuations over the next year as investors wait to see if its robust revenue growth can offset its declining gross margins. It might still eke out some modest gains, but it probably won't replicate its rally from the past 12 months. Should you invest $1,000 in Arista Networks right now? Before you buy stock in Arista Networks, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arista Networks wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
CBC
39 minutes ago
- CBC
Portable sauna units worth roughly $75K stolen from owner's lot in Winnipeg
The owner of a Winnipeg sauna company is worried about his family's livelihood and the future of their business after he said three of their mobile units were stolen from a lot ahead of its busiest season for rentals. The mobile saunas, made out of cedar and resembling the shape of a barrel, were picked by a black Dodge Ram, which then drove away from the lot on Archibald Street, Amir Hamed, owner of the Backyard Barrel business, told CBC News. The theft lasted a number of hours with the first barrel seen towed on surveillance footage at around 11 p.m. Friday and the last just after 3 a.m. on Saturday, Hamed said. "I honestly never thought they would get stolen, we even had the wheel locks on them … the back doors were locked," he said. "It's really unfortunate, but we're trying to make the best of it," Hamed said. "They're each worth $25,000, so we have $75,000 roughly missing." Winnipeg police said they received a report about the incident which will be referred to the property crimes unit for a follow-up investigation. The Backyard Barrel business operates five mobile units and Hamed said the two that weren't stolen had been rented out. Hamed had been trying to sell the business to spend more time with his family. He managed to secure a buyer but the deal fell through on Friday and hours later the three mobile units were stolen from his property. While he doesn't think the sale is related to the theft, both happening on the same day is "a lot of stuff to deal with." He is afraid the saunas will be torn apart and sold in pieces. But he remains hopeful the units can be recovered without major damages before September when the demand for mobile units starts to soar as temperature begins to drop. "This is our livelihood and it's going to impact selling it drastically," Hamed said. He is encouraging people to keep an eye for the units, in case they are listed for sale online. They are trademarked and have a tin roof, a wooden stove and a panoramic window.
Toronto Sun
an hour ago
- Toronto Sun
GUNTER: Trudeau cost Canada a chance to get into global LNG game — Trump and U.S. are reaping the benefit
President Donald Trump reads from a paper and European Commission President Ursula von der Leyen listens after reaching a trade deal between the U.S. and the EU at the Trump Turnberry golf course in Turnberry, Scotland Sunday, July 27, 2025. Photo by Jacquelyn Martin / AP Last Sunday, at President Donald Trump's golf resort in Scotland (a.k.a. King Donald's summer palace), Ursula von der Leyen, president of the European Union pledged European countries would buy US$750 billion (over $1 trillion Canadian) of U.S. energy – largely LNG – over the next three years in return for Trump promising to impose only 15% tariffs on the union's member states. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account Boy, those American and European trade negotiators must be dunces. Don't they know that three years ago, then-German Chancellor Olaf Scholz made a special trip to Canada to ask our government to sell tens of billions in LNG to his country? Our economic genius of a prime minister, Justin Trudeau rejected Scholz's request because 'there is no business case' for selling LNG to Europe. The Germans almost immediately turned around and signed a 15-year agreement with Qatar for about $1.5 billion a year in LNG from that Gulf state. This past Thursday, the South Koreans made a similar deal with the U.S. — $100 billion (about $138 billion Canadian) in energy over four years, primarily LNG. What's wrong with these countries? Can they not see that the greatest economic mind of the 21st Century, Justin Pierre James Trudeau, had decreed it was foolhardy to sign such agreements? Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. The U.S. deals with the EU and Korea just for LNG are worth about $800 billion Canadian over the next four years. The rest of the sales are for oil and nuclear fuels. A good part of that market might have been Canada's had we not been ruled by a 'green' dreamweaver and eco-cultist who prevented this country from jumping into the world LNG market early in the game. Now the Americans have sucked up a lot of the oxygen in the room, and it will be hard for Canada to get a foothold, even if current Liberal Prime Minister Mark Carney gets off his duff and agrees to more pipelines and LNG ports. Trudeau's thinking (which remains Carney's thinking until the current Liberal government does more than just talk a good game) cost Canada at least $400 billion in investment during the Trudeau decade, drove down our per capita income, dropped us out of the 25 richest countries in the world, distorted our housing market and drove up prices and unemployment. This advertisement has not loaded yet, but your article continues below. Even after the change in prime ministers this year, the OECD still projects Canada will have the lowest level of economic growth of any developed country in the world for at least the next 20 years, because we just can't bring ourselves to do the tough work of becoming an energy superpower. Do you have any idea how much government revenue could be generated from $400 billion? At least $100 billion in corporate taxes and energy royalties. And that doesn't include more income tax collected from more Canadians working at higher-paying jobs. I was being facetious above, of course, when I said Trudeau was an economic genius. I would list him and the economic devastation he wrought as the worst government this country has ever had. He and his woke, 'green' obsessed cabinet dug a huge pit and threw us in it. (Then he trotted off to a Katy Perry concert and date.) This advertisement has not loaded yet, but your article continues below. Mark Carney may sound and look more competent than Trudeau, but is he? Just about half of his cabinet were ministers in Trudeau's cabinet and were just as obsessed as Justin with combatting climate change and shutting down oil and gas. They voted in lockstep with Trudeau for the emission caps, harsh eco regulations, EV mandate, net-zero power grid and opposition to resource development and pipelines. Carney himself spent the better part of a decade, before becoming P.M., acting as the U.N.'s ambassador on 'green' investing (even though in his own portfolio he retained millions of shares in oil companies). He also frequently advocated leaving most of today's proven oil and gas reserves in the ground. Count me skeptical that this leopard has changed his spots. This advertisement has not loaded yet, but your article continues below. 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