Latest news with #ANET
Yahoo
6 days ago
- Business
- Yahoo
Arista Networks (ANET) Eyes $750M AI Back-End Target; Citi Raises Price Target to $112
Citi recently raised the price target on Arista Networks, Inc. (NYSE:ANET) to $112 from $97 and kept a Buy rating on the shares. Arista engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments. The advisory, which expects the company to double its share in the Ethernet AI back end in FY25 and anticipates upward revisions to FY25 and FY26 estimates, believes the company is on track to achieve its $750 million AI back-end target for FY25, which would reflect nearly 20% share. The advisory's estimates are unchanged, but it raised its multiple given Arista's rising AI market share and higher market multiples. A technician in a server room managing a large-scale network of computers. During the first quarter earnings release, management provided Q2 guidance with expected revenues of approximately $2.1 billion. Gross margin is projected at 63%, incorporating tariff impacts. Operating margin is anticipated to be 46%, with an effective tax rate of 21.5%. For fiscal year 2025, the company reiterated its revenue guidance of $8.2 billion, citing ongoing momentum in AI and cloud businesses despite macroeconomic uncertainties. While we acknowledge the potential of ANET, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ANET and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None.
Yahoo
29-05-2025
- Business
- Yahoo
Arista Networks (ANET) Eyes $750M AI Back-End Target; Citi Raises Price Target to $112
Citi recently raised the price target on Arista Networks, Inc. (NYSE:ANET) to $112 from $97 and kept a Buy rating on the shares. Arista engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments. The advisory, which expects the company to double its share in the Ethernet AI back end in FY25 and anticipates upward revisions to FY25 and FY26 estimates, believes the company is on track to achieve its $750 million AI back-end target for FY25, which would reflect nearly 20% share. The advisory's estimates are unchanged, but it raised its multiple given Arista's rising AI market share and higher market multiples. A technician in a server room managing a large-scale network of computers. During the first quarter earnings release, management provided Q2 guidance with expected revenues of approximately $2.1 billion. Gross margin is projected at 63%, incorporating tariff impacts. Operating margin is anticipated to be 46%, with an effective tax rate of 21.5%. For fiscal year 2025, the company reiterated its revenue guidance of $8.2 billion, citing ongoing momentum in AI and cloud businesses despite macroeconomic uncertainties. While we acknowledge the potential of ANET, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ANET and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
Arista, Cisco Poised to Dominate AI Switch Market
Arista Networks (NYSE:ANET) and Cisco Systems (NASDAQ:CSCO) stand to gain most from the $29 billion AI switch market by 2029, Evercore ISI says. Warning! GuruFocus has detected 2 Warning Sign with ANET. Back-end network switching for AI is set to grow from $6.3 billion in 2024 to $29 billion by 2029, with hyperscalers driving $17.6 billion of that demand. Evercore's Amit Daryanani estimates Arista could add $7 billion in revenue and over $2.00 in EPS by hitting market-share targetsroughly matching its 2024 run ratewhile Cisco could tack on $3.5 billion in revenue and $0.25 in EPS. Ethernet is forecast to capture the lion's share of growth, potentially up to 90%, as AI clusters at Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG) and Amazon (NASDAQ:AMZN) scale out. Daryanani notes that traditional data-center switches won't cut it for AI workloads, and that large enterprises will lean on model-as-a-service rather than build full clusters in-house. He also flags upside for Celestica (NYSE:CLS) and NVIDIA (NASDAQ:NVDA) in supporting components and InfiniBand alternatives. Investors should care because Arista's and Cisco's AI-centric networking strength could drive outsized revenue and profit growth well beyond the broader IT spending cycle. This article first appeared on GuruFocus.
Forbes
27-05-2025
- Business
- Forbes
Should You Buy AMZN Stock At 33 Times Earnings?
Question: Why would you pay 33 times earnings for Amazon stock (NASDAQ: AMZN) when you can buy Arista Networks stock at 36 times earnings? It wouldn't make much sense, especially when considering these three key points: Separately, see – Should You Buy MRK Stock At $80? Now, Arista isn't exactly a safe haven, as its past behavior during market shocks demonstrates. For instance, ANET stock fell 38.4% during the 2022 inflation shock, a much steeper drop than the S&P 500's 25.4% peak-to-trough decline. Similarly, it lost 34.0% during the 2020 Covid-19 pandemic fall, matching the S&P 500's 33.9% fall. So, while it's not a 'safe' stock, it has already taken significant damage, dropping from around $130 in January to roughly $90 today. In contrast, if you seek a more even-handed approach, consider the Trefis High Quality strategy, which has outperformed the market with over 91% returns since inception, as evident in its performance metrics. Arista builds the essential networking gear that powers the internet, especially for big companies running cloud computing and AI. If you believe that cloud and AI will keep growing, then Arista could be a good long-term investment. Arista supplies the critical tools needed for the AI and cloud computing boom. This means you don't have to guess which major tech company—like Microsoft, Amazon (AWS), Google, or Meta—will win the AI race. All of them are spending massive amounts of money—hundreds of billions collectively—on data centers, and a part of that money goes toward the kind of high-performance networking equipment Arista specializes in. Also, see – Buy or Sell ANET Stock. Arista's earnings might disappoint, and sales growth could slow from 20% last year to around 15% in the near term as companies focus on saving cash. Then there's always the unexpected and unimagined. Definitely do not touch this stock if you can't withstand a 40% downside from current levels. The worst thing you could do is sell at that point. Instead, talk to an advisor who has seen four bear markets in the last 30 years and ask about the Trefis HQ strategy and other clever ways to take advantage of a market downturn. A key insight: much money is made in this market if you don't lose your composure. All in all, if you're a long-term investor looking to invest and forget for the next 3-5 years, ANET stock right now could be an interesting entry point.
Yahoo
27-05-2025
- Business
- Yahoo
ANET vs. HPE: Which Networking Stock is a Smart Investment Now?
Arista Networks Inc. ANET and Hewlett Packard Enterprise HPE are major players in the networking industry worldwide. Arista provides industry-leading cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center Packard Enterprise boasts a broad portfolio that comprises server, cloud-native and hybrid solutions across storage and private cloud space. The company is also a leading network solutions provider offering wired and wireless local area networks, campus, branch, and data center switching, software-defined wide-area networks, private and public cellular network software, network security and diverse portfolio offering, both HPE and ANET hold a strong foothold in the networking industry. Let us analyze in depth the competitive strengths and weaknesses of the companies to understand who is in a better position to maximize gains from the emerging market trends. HPE is placing a strong emphasis on expanding its networking business. Its Aruba Networking portfolio is designed to offer end-to-end networking solutions by combining hardware products such as Wi-Fi access points, switches, and gateways with software and services such as cloud-based management, network management, network access control, software-defined wide-area networking, network security, analytics and assurance, location services software and more. Such comprehensive offerings coupled with a cloud native approach provide customers with a unified framework that effectively matches all requirements for connectivity, security across campus, branch, data center and as well as remote strengthen its market position in the networking industry, HPE has inked an agreement to acquire Juniper Networks Inc. JNPR in 2024. The strategic move aims to integrate Juniper's extensive array of cloud-based networking solutions, software and services, including Mist AI, with HPE Aruba Networking and HPE AI interconnect. This is expected to expedite the development of secure, unified networking solutions optimized for hybrid cloud and AI. The merger proposal has received approval from several antitrust regulators, including the European Commission and the U.K. it is to be noted that HPE and Juniper are the second and third largest WLAN (Wireless Local Area Network) solution providers in the industry. The merger is facing roadblocks in the United States. Department of Justice (DoJ) intervenes on the ground that the merger will reduce competition in the enterprise networking market, leading to lower innovation and reduced options for customers. Several industries that depend on networking products would be hit by higher prices. HPE is set to defend the acquisition on several grounds. Adoption of AI and cloud technologies has lowered the entry barrier in the industry, and the company has already received regulatory clearance from several authorities. HPE faces stiff competition from Cisco Systems Inc. CSCO, Arista, Ubiquiti, Palo Alto Networks and several others in the networking market. Cisco holds about 50% market share in the industry. Hence. HPE is arguing that the buyout with Juniper will promote fair competition and drive innovation in the market. It is to be seen whether HPE can clear this roadblock in the upcoming lawsuit initiated by the DoJ. The termination of the merger will be a major setback for HPE's ambition to become a major player in the networking debt-to-capital ratio stands at 34.4% with a current ratio of 1.33. The company is taking initiative to drive cost savings to streamline its operations and improve productivity. In the first quarter of 2025, HPE utilized $390 million in cash against a cash generation of $64 million in the year-ago quarter. With a strong focus on innovation and portfolio strength, Arista has created a niche market in the data center and cloud networking domain. The company has introduced a wide range of solutions for cloud, Internet service providers, and enterprise networks to meet the rising demands of AI/ML-driven network architectures. The Arista 2.0 strategy is resonating well with customers with its modern networking platforms being foundational for transformation from silos to centers of data. The company is focused on providing the best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms. Such a strategy is driving customer offers one of the broadest ranges of datacenter and campus Gigabit Ethernet switches (1/2.5/5/10/25/40/50/100/400) and routers in the industry. It holds a leadership position in 100-gigabit Ethernet switching for the high-speed datacenter segment. Moreover, the 200- and 400-gig high-performance switching products are also gaining market traction. Arista's routing and switching platforms boast industry-leading capacity, low latency, port density and power efficiency. The company also continues to innovate in areas such as deep packet buffers, embedded optics and reversible cooling. Such a comprehensive portfolio augurs well for its long-term of March 31, 2025, the company had $1.84 billion in cash and cash equivalents and $257.8 million in other long-term liabilities. During the quarter, it repurchased $787.1 million worth of shares, the largest repurchase in the company's history. It generated $641.7 million in cash from operating activities. The company's strong balance sheet with healthy cash flow generation indicates efficient capital management and streamlined operations. The company is well-positioned to invest in growth initiatives, and its business model is resilient to market downturns. Its current ratio stands at 3.93 with no long-term the company faces stiff competition in cloud networking solutions, particularly in the 10-gigabit Ethernet and above. Cisco is the dominant player in the data center networking market by virtue of its diverse portfolio of IP-based networking products. Apart from Cisco, it also faces competition from Dell and HPE. The company is exposed to significant customer concentration risks. The Zacks Consensus Estimate for Arista's 2025 sales and EPS implies year-over-year growth of 18.72% and 12.78%, respectively. The EPS estimates have been trending northward over the past 60 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for HPE's 2025 sales implies year-over-year growth of 8.2%, while that for EPS implies a decline of 9.55%. The EPS estimates have been trending southward over the past 60 days. Image Source: Zacks Investment Research Over the past year, ANET has gained 19.1%, while HPE has declined 5.3% over the same period. Image Source: Zacks Investment ResearchHPE looks more attractive than Arista from a valuation standpoint. Going by the price/earnings ratio, the company's shares currently trade at 8.87 forward earnings, significantly lower than 33.65 for Arista. Image Source: Zacks Investment Research HPE carries a Zacks Rank #4 (Sell) at present, while Arista carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks companies are steadily expanding their networking portfolio with an AI focus and expect their net sales to improve in 2025. HPE's broader portfolio offers better stability and resilience in a volatile market. However, Arista is steadily strengthening its position in the Data Center and Cloud Networking vertical, driven by its highly scalable, programmable platform that offers data-driven automation, analytics and world-class support services. Its strong cash flow generation and effort to improve shareholder return with an aggressive buyback program are positive. Upward estimate revision shows investors' growing confidence in Arista stock. Hence, with a superior Zacks Rank and better price performance, Arista appears to be a better investment option at the moment. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report Juniper Networks, Inc. (JNPR) : Free Stock Analysis Report Arista Networks, Inc. (ANET) : Free Stock Analysis Report Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
