Arista Networks (ANET): Cramer Says ‘Better Than NVIDIA'? Here's the Truth

Yahoo

30-01-2025

We recently published a list of . In this article, we are going to take a look at where Arista Networks Inc (NYSE:ANET) stands against other stocks discussed by Jim Cramer with insights on the DeepSeek AI sell-off.
On the day that Wall Street's favorite AI GPU stock bled 17% in the wake of investors panicking about Chinese AI startup DeepSeek's low development costs for AI, Jim Cramer had a lot to say about the topic. Cramer has been one of the biggest fans of the GPU company, and right off the bat, he started out by sharing that the key thing to consider now is whether the GPU orders for the firm will materialize.
He also commented on 'traveler stocks' or those that have benefited from the broad AI sentiment. Cramer shared 'What I find most interesting is that, the fellow travelers to these are the nuclear stocks that have been up a lot. . . .Are the memes. Are the crypto.' He commented that the fact that these stocks were all simultaneously losing value was not great for the market. According to Cramer, 'So looks [like] they are all you know one stock and that is not good. That's not good because that says you have hype and froth in here that has to come out no matter what.'
The CNBC host also shared his experience using DeepSeek's R-1 model. In his previous remarks, Cramer revealed that he was a fan of ChatGPT and had used OpenAI's product to research stocks ahead of his appearances on CNBC. However, he wasn't impressed by R-1. Cramer outlined that he 'tried to do a couple of, I tried to get it to give me Netflix's performance from 2010. And it says I can't do that. Well I mean, honestly? I can do that.'
Another aspect of R-1 that left him unimpressed was censorship. 'This is a Chinese product,' Cramer said. 'So when I put into my very helpful DeepSeek, what famous picture has a man with grocery bags in front of a tank? And it initially says, the famous picture you are referring to, Tank Man, unknown rebel, June 5, 1989,' he added. While this is all good, soon after the initial response, R-1 'takes that back and says sorry, can't help you with that. And then secondarily it says sorry that's beyond my current scope,' according to him.
When co-host Carl Quintanilla asked him whether it was worth buying any of the AI stocks, Cramer was rather direct. He shared 'I don't have the knowledge to be able to make that decision. It's better to own that.' Cramer also noted that before Monday's appearance, there was a debate about whether 'can we just make a determination, or is the determination that we don't want to let anybody down so we can't make that?' Given the absolute bloodbath in the premarket that day, he felt 'like, whatever you do, maybe twisted between now and the opening.' As a result, Cramer shared 'But sometimes you have to admit, like if you were at the hedge fund you'd just say, you know I'm not sure what to do, it's not a cop-out. I'm not sure what to do.'
However, with respect to the doubt surrounding AI, he added 'When in doubt do you go against Zuckerberg? Do you go against Ellison? And I come back and say, I don't know. Sometimes it's better to say I don't know.'
Like social media CEO Mark Zuckerberg's AI, DeepSeek is also open source. When asked about whether being open source threatens the ecosystem, Cramer replied 'Yeah I know that, again, I don't want to front row Mark Zuckerberg on what he's saying, but I would say that we do have tremendous chip allocation problems here. And I know that David, we, if you have open source, would you think, that you do not need as many chips. Right. Not necessarily.'
The sell-off in tech stocks did make him feel that 'it's not such a bad idea to look away from one moment and go back and say the healthcare rotation was so powerful last week.'
To make our list of the stocks that Jim Cramer talked about, we listed down the stocks he mentioned during CNBC's Squawk on the Street aired on January 27th.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. ().
A technician in a server room managing a large-scale network of computers.
Number of Hedge Fund Holders In Q3 2024: 70
Arista Networks Inc (NYSE:ANET) is a computer hardware and software company that primarily sells networking products. Since networking products such as Ethernet adapters are heavily used in AI data centers, it has performed well on the stock market. Arista Networks (NYSE:ANET)'s shares closed in 2024 after gaining 92%, but the impact of DeepSeek's AI sell-off was equally brutal. The stock lost a whopping 22% amidst investor panic about lower demand for data centers due to lower AI training costs. As the stock fell, here's what Cramer said about Arista Networks Inc (NYSE:ANET):
'And then, Arista, people forget, Arista is integral to [the] inside. They were white boxing a lot of technology inside a data center, there are some people who think, no, that it's no doubt that is a better stock than NVIDIA. I always question that and it seems a little fanciful frankly. But I know people who hold that view.'
Overall, ANET ranks 9th on our list of stocks discussed by Jim Cramer with insights on the DeepSeek AI sell-off. While we acknowledge the potential of ANET as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ANET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.