{"id":5582,"date":"2023-11-01T16:17:02","date_gmt":"2023-11-01T16:17:02","guid":{"rendered":"https:\/\/connectwithfund.com\/markets\/arista-networks-stock-gains-14-to-hit-record-high\/"},"modified":"2023-11-01T16:17:03","modified_gmt":"2023-11-01T16:17:03","slug":"arista-networks-stock-gains-14-to-hit-record-high","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=5582","title":{"rendered":"Arista Networks Stock Gains 14% To Hit Record High"},"content":{"rendered":"<div>\n<p>In May, AI chip maker Nvidia became the bellweather stock for investors seeking to ride the Generative AI wave. Since peaking in August, Nvidia stock has lost 18% of its value.<\/p>\n<p>On October 31, the baton was passed to Arista Networks<fbs-ticker data-name=\"ANET\" data-href=\"https:\/\/www.forbes.com\/companies\/arista-networks\" data-type=\"stock\"><br \/>\n  ANET<br \/>\n <\/fbs-ticker>, a fast-growing maker of cloud computing network gear, posted expectations-trouncing quarterly results.<\/p>\n<p>With help from the Generative AI tailwind, Arista soared past its 12 month price target of $172, about which I wrote in June.<\/p>\n<p>Has Arista stock peaked or will it keep rising? Here are four reasons Arista is well-positioned to ride the Generative AI tidal wave:<\/p>\n<ul>\n<li>Big market for AI networking<\/li>\n<li>Compelling customer value proposition<\/li>\n<li>Customer-focused innovation<\/li>\n<li>Outstanding leadership team<\/li>\n<\/ul>\n<p>If Arista keeps beating and raising in future quarters, its stock could blow through its 12 month price target of $219.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Arista\u2019s Boffo Third Quarter Earnings<\/h2>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<p>Arista\u2019s stock responded favorably to its third quarter 2023 earnings report which exceeded investor expectations.<\/p>\n<p>Here are the highlights, according to <em data-ga-track=\"ExternalLink:https:\/\/www.investors.com\/news\/technology\/anet-stock-arista-earnings-q32023\/\">Investor\u2019s Business Daily<\/em>:<\/p>\n<ul>\n<li><strong>Q3 Revenue up 28% to $1.51 billion <\/strong>\u2014 $30 million more than the analyst consensus.<\/li>\n<li><strong>Q3 Earnings per share up 46% to $1.83 per share<\/strong> \u2014 25 cents per share more than the analyst consensus.<\/li>\n<li><strong>Q4 revenue guidance of 4.4% growth to $1.525 billion<\/strong> \u2014 $55 million more than the analyst consensus.<\/li>\n<\/ul>\n<p>Wall Street reacted favorably to Arista\u2019s report, Here are four examples:<\/p>\n<ul>\n<li><strong>Gains in market share and higher margins.<\/strong> &#8220;Share gains in enterprise data center, campus networking, and cloud networking are driving upside,&#8221; said Barclays analyst Tim Long in a report. \u201cMargins continue to improve on better component pricing and operating leverage,\u201d IDB reported.<\/li>\n<li><strong>New orders from existing customers.<\/strong> Jefferies analyst George Notter estimated Oracle now accounts for 5% of Arista\u2019s sales. Analysts also expect Arista to win more orders from Alphabet, IBD<fbs-ticker data-name=\"IBD\" data-href=\"https:\/\/www.forbes.com\/investment-funds\/ibd\/\" data-type=\"etf\"><br \/>\n   IBD<br \/>\n  <\/fbs-ticker> wrote.<\/li>\n<li><strong>Winning in large enterprise market.<\/strong> Arista is boosting its market share in among large companies, government agencies and educational institutions \u2014 dubbed the large enterprise market. Arista \u201cis seeing strength among traditional high-tech and financial customers as well as newer verticals such as health care and education,&#8221; wrote Goldman Sachs analyst Michael Ng in a client report.<\/li>\n<li><strong>Potential boost from Generative AI.<\/strong> By 2025, some analysts expect customer investments in artificial intelligence infrastructure to increase demand for network bandwidth Arista\u2019s products supply, <em>IBD<\/em> noted.<\/li>\n<\/ul>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Big Market For AI Networking<\/h2>\n<p>The market opportunity for such AI networking is considerable. As I wrote in June, Morgan Stanley<fbs-ticker data-name=\"MS\" data-href=\"https:\/\/www.forbes.com\/companies\/morgan-stanley\" data-type=\"stock\"><br \/>\n  MS<br \/>\n <\/fbs-ticker> analyst Meta Marshall estimated AI networking will be an $8 billion opportunity by 2028 \u201cwith Arista being one of the biggest beneficiaries.\u201d<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Compelling Customer Value Proposition<\/h2>\n<p>While not alone in developing technology for speeding up generative AI, Arista offers a uniquely valuable product. Cisco Systems and Juniper Networks supply proprietary technology. Other vendors offer so-called white box solutions which save money by running bespoke software on commodity hardware rather than expensive, proprietary switches.<\/p>\n<p>Arista provides customers a hybrid approach depending on the type of application. \u201cWe are comfortable with the idea of a white box since that is how we started as software running on everyone else\u2019s hardware. We want to provide customers what they need. For less mission-critical applications, they can use white boxes. For specialized applications \u2014 such as turnkey healthcare or financial solutions \u2014 they need Arista.,\u201d Arista CEO Jayshree Ullal told me in May 2023.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Customer-Focused Innovation<\/h2>\n<p>Arista innovates to keep its customers buying. \u201cWe look at our talent, the market potential, and we listen to the customer,\u201d Ullal told me. \u201cThey ask us to do more. High performance data switching was number one. Next year, 70% said \u2018You should be in the campus.\u2019 We went from routing, to campus, to wide area (Ethernet).\u201d<\/p>\n<p>Arista builds or acquires to add \u201cnatural adjacencies\u201d to its product portfolio. An example is security for which the company built \u201ca security network telemetry.\u201d When Arista saw it was missing wireless, it made an acquisition.<\/p>\n<p>Arista wants to retain the services of the entrepreneur who founded the companies it acquires. \u201cThey should fit with our culture, share our cloud vision, and one plus one should be greater than two. We want to get the entrepreneur to integrate with us and deliver customer solutions,\u201d she said.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Outstanding Leadership<\/h2>\n<p>Ullal has been CEO since September 2008. In my view, she is among the best CEOs in the technology industry. Between 2010 and 2022, Arista revenues grew at an average annual rate of 33%. Since going public in June 2014, Arista stock has increased at an average annual rate of 31%.<\/p>\n<p>Here are some ways Ullal contributed to the company\u2019s success:<\/p>\n<ul>\n<li><strong>She helped the company recover from the Lehman Brothers bankruptcy.<\/strong> In 2008 Arista\u2019s client \u2014 Lehman Brothers \u2014 filed for bankruptcy. Fortunately, the technology Arista supplied Lehman helped other financial institutions survive the financial crisis, she told me.<\/li>\n<li><strong>She evolved from being very hands-on to setting strategic direction and empowering experts. <\/strong>Her leadership style changed as the company has scaled through three phases. \u201cIn the first phase, I was jumping into everything. As we reached $1 billion to $5 billion in revenue, I worked with co-founder and chair Andy Bechtolsheim and co-founder and chief technology officer Ken Duda and the leadership team over 10 years. My role was to look at the strategic direction of the company and to empower experts. In the third phase, as we aim to achieve revenue in the multibillions, I am thinking about Arista\u2019s purpose and its platform as we diversify to security and availability,\u201d Ullal said.<\/li>\n<li><strong>She built a culture of low-ego and collaboration on behalf of customer success. <\/strong>At Arista, she built a culture that encourages people to work together to make customers successful, she told me in May. \u201cWhen a startup is trying to get off the ground, the CEO often feels compelled to get involved in everything. Such centralized control limits a company\u2019s ability to reach escape velocity. At that limit, the company faces a choice. Either the CEO learns how to delegate and empower people or the board replaces the current CEO with a new one who can,\u201d she said.<\/li>\n<li><strong>She enhanced Arista\u2019s bench strength. <\/strong>Ullal feels a fiduciary responsibility to build the next generation of Arista\u2019s leaders. \u201cFor succession planning, I have one or two candidates internally or externally. It starts with me and others to build bench strength. There are people in their 40s, 50s, and 60s who might want to retire. For the next CEO, we need an operator, someone who can embrace our vision and fit it with their style,\u201d she explained.<\/li>\n<\/ul>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Where Will Arista Stock Go Next?<\/h2>\n<p>Arista shares are expected to rise \u2014 but not much. Based on 16 Wall Street analysts offering 12 month price targets for Arista, the average price target is $218.79 \u2014 representing a 5.8% change from the last price of $206.79, according to <em data-ga-track=\"ExternalLink:https:\/\/www.tipranks.com\/stocks\/anet\/forecast\">TipRanks<\/em>.<\/p>\n<p>Not everyone is so bullish. One analyst views Arista as very overvalued. <em data-ga-track=\"ExternalLink:https:\/\/www.morningstar.com\/stocks\/arista-earnings-valuation-up-160-150-after-results-guidance-beat-our-expectations\">Morningstar<\/em><fbs-ticker data-name=\"MORN\" data-href=\"https:\/\/www.forbes.com\/companies\/morningstar\" data-type=\"stock\"><br \/>\n  MORN<br \/>\n <\/fbs-ticker> analyst William Kerwin set a price target of $160 \u2014 implying Arista shares are 23% too high.<\/p>\n<p>Kerwin sounds bullish \u2014 but thinks the company is overvalued. \u201cArista is putting together an impressive year of results in 2023, reflecting market share gains in the enterprise market and ongoing cloud titan spending driven by artificial intelligence buildouts. We see Arista as the preferred choice for the highest-speed networks with its hardware and software design prowess, allowing it to be a beneficiary of cloud AI spending and reflecting its wide economic moat,\u201d he wrote.<\/p>\n<p>I think Kerwin is too pessimistic. After all, if Arista sustains its trend of beating investor expectations, its stock price will likely keep rising. I am not sure what Kerwin things could trip up Arista.<\/p>\n<p>So I would not bet against this AI networking juggernaut.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/petercohan\/2023\/11\/01\/arista-networks-stock-gains-14-to-hit-record-high\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In May, AI chip maker Nvidia became the bellweather stock for investors seeking to ride the Generative AI wave. Since peaking in August, Nvidia stock has lost 18% of its value. On October 31, the baton was passed to Arista Networks ANET , a fast-growing maker of cloud computing network gear, posted expectations-trouncing quarterly results. With help from the Generative AI tailwind, Arista soared past its 12 month price target of $172, about which I wrote in June. Has Arista stock peaked or will it keep rising? Here are four reasons Arista is well-positioned to ride the Generative AI tidal<\/p>\n","protected":false},"author":1,"featured_media":5583,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"class_list":["post-5582","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Arista Networks Stock Gains 14% To Hit Record High | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"In May, AI chip maker Nvidia became the bellweather stock for investors seeking to ride the Generative AI wave. Since peaking in August, Nvidia stock has\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/connectwithfund.com\/?p=5582\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arista Networks Stock Gains 14% To Hit Record High | ConnectWithFund\" \/>\n<meta property=\"og:description\" content=\"In May, AI chip maker Nvidia became the bellweather stock for investors seeking to ride the Generative AI wave. Since peaking in August, Nvidia stock has\" \/>\n<meta property=\"og:url\" content=\"https:\/\/connectwithfund.com\/?p=5582\" \/>\n<meta property=\"og:site_name\" content=\"ConnectWithFund\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-01T16:17:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-01T16:17:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/connectwithfund.com\/wp-content\/uploads\/2023\/11\/1698855422_0x0.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1350\" \/>\n\t<meta property=\"og:image:height\" content=\"900\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/connectwithfund.com\/?p=5582\",\"url\":\"https:\/\/connectwithfund.com\/?p=5582\",\"name\":\"Arista Networks Stock Gains 14% To Hit Record High | ConnectWithFund\",\"isPartOf\":{\"@id\":\"https:\/\/connectwithfund.com\/#website\"},\"datePublished\":\"2023-11-01T16:17:02+00:00\",\"dateModified\":\"2023-11-01T16:17:03+00:00\",\"author\":{\"@id\":\"https:\/\/connectwithfund.com\/#\/schema\/person\/9344cb2de07361e178f5c834d2167e52\"},\"description\":\"In May, AI chip maker Nvidia became the bellweather stock for investors seeking to ride the Generative AI wave. Since peaking in August, Nvidia stock has\",\"breadcrumb\":{\"@id\":\"https:\/\/connectwithfund.com\/?p=5582#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/connectwithfund.com\/?p=5582\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/connectwithfund.com\/?p=5582#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/connectwithfund.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Arista Networks Stock Gains 14% To Hit Record High\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/connectwithfund.com\/#website\",\"url\":\"https:\/\/connectwithfund.com\/\",\"name\":\"FinMarkPros\",\"description\":\"Latest Finance News and Updates\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/connectwithfund.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/connectwithfund.com\/#\/schema\/person\/9344cb2de07361e178f5c834d2167e52\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/connectwithfund.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/3740b286006c76c86a45c4879850da000667bb6f5bbe053edd4a416d2cc4fb80?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/3740b286006c76c86a45c4879850da000667bb6f5bbe053edd4a416d2cc4fb80?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/connectwithfund.com\"],\"url\":\"https:\/\/connectwithfund.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Arista Networks Stock Gains 14% To Hit Record High | ConnectWithFund","description":"In May, AI chip maker Nvidia became the bellweather stock for investors seeking to ride the Generative AI wave. Since peaking in August, Nvidia stock has","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/connectwithfund.com\/?p=5582","og_locale":"en_US","og_type":"article","og_title":"Arista Networks Stock Gains 14% To Hit Record High | ConnectWithFund","og_description":"In May, AI chip maker Nvidia became the bellweather stock for investors seeking to ride the Generative AI wave. Since peaking in August, Nvidia stock has","og_url":"https:\/\/connectwithfund.com\/?p=5582","og_site_name":"ConnectWithFund","article_published_time":"2023-11-01T16:17:02+00:00","article_modified_time":"2023-11-01T16:17:03+00:00","og_image":[{"width":1350,"height":900,"url":"https:\/\/connectwithfund.com\/wp-content\/uploads\/2023\/11\/1698855422_0x0.jpg","type":"image\/jpeg"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/connectwithfund.com\/?p=5582","url":"https:\/\/connectwithfund.com\/?p=5582","name":"Arista Networks Stock Gains 14% To Hit Record High | ConnectWithFund","isPartOf":{"@id":"https:\/\/connectwithfund.com\/#website"},"datePublished":"2023-11-01T16:17:02+00:00","dateModified":"2023-11-01T16:17:03+00:00","author":{"@id":"https:\/\/connectwithfund.com\/#\/schema\/person\/9344cb2de07361e178f5c834d2167e52"},"description":"In May, AI chip maker Nvidia became the bellweather stock for investors seeking to ride the Generative AI wave. Since peaking in August, Nvidia stock has","breadcrumb":{"@id":"https:\/\/connectwithfund.com\/?p=5582#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/connectwithfund.com\/?p=5582"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/connectwithfund.com\/?p=5582#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/connectwithfund.com\/"},{"@type":"ListItem","position":2,"name":"Arista Networks Stock Gains 14% To Hit Record High"}]},{"@type":"WebSite","@id":"https:\/\/connectwithfund.com\/#website","url":"https:\/\/connectwithfund.com\/","name":"FinMarkPros","description":"Latest Finance News and Updates","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/connectwithfund.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/connectwithfund.com\/#\/schema\/person\/9344cb2de07361e178f5c834d2167e52","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/connectwithfund.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/3740b286006c76c86a45c4879850da000667bb6f5bbe053edd4a416d2cc4fb80?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/3740b286006c76c86a45c4879850da000667bb6f5bbe053edd4a416d2cc4fb80?s=96&d=mm&r=g","caption":"admin"},"sameAs":["https:\/\/connectwithfund.com"],"url":"https:\/\/connectwithfund.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/connectwithfund.com\/index.php?rest_route=\/wp\/v2\/posts\/5582","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/connectwithfund.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/connectwithfund.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/connectwithfund.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/connectwithfund.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5582"}],"version-history":[{"count":1,"href":"https:\/\/connectwithfund.com\/index.php?rest_route=\/wp\/v2\/posts\/5582\/revisions"}],"predecessor-version":[{"id":5584,"href":"https:\/\/connectwithfund.com\/index.php?rest_route=\/wp\/v2\/posts\/5582\/revisions\/5584"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/connectwithfund.com\/index.php?rest_route=\/wp\/v2\/media\/5583"}],"wp:attachment":[{"href":"https:\/\/connectwithfund.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/connectwithfund.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/connectwithfund.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}