Summary
- Arista Networks is a leader in high performance switches and supplies hardware for the main cloud titans such as Meta Platforms and Microsoft.
- The company reported strong financial results for the fourth quarter as it beat both revenue and earnings growth estimates.
- I noticed Arista’s revenue growth rate is also accelerating, which is fantastic given the “recessionary environment”.
- Its latest 7800 switch is ideally suited for AI workloads and Arista has embedded AI troubleshooting bots into its networking software.
Arista Networks (NYSE:ANET) is a leading IT networking company which is a leader in high-performance ethernet switches for data centers. In fact, Gartner peer reviews rate Arista with 4.7 stars out of 5, which is greater than Cisco Nexus switches which have ~4.6 stars out of 5. This is despite Cisco (CSCO) having more reviews, as it is more of a mainstream provider. Arista is also poised to become the backbone of the rapidly growing AI industry due to its new 7800 switch, which is ideally suited for AI workloads (more on this later). Given Arista has deep partnerships with “cloud titans” such as Meta Platforms (META) and Microsoft (MSFT), the company has a frictionless route to market. In the fourth quarter of 2022, the company reported strong results, beating both top and bottom line growth estimates. In this post, I’m going to break down its fourth quarter financials, its tailwinds across the cloud, AI, and reveal my valuation model for the stock. Let’s dive in.
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