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Can ANET Stock Sustain its Mojo With Arista 2.0 Strategy?
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Arista Networks, Inc. (ANET - Free Report) is benefiting from the expanding cloud networking market, which is led by a strong demand for scalable infrastructure. In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance and programmability, enabling integration with third-party applications for network management, automation and orchestration.
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 boasts a comprehensive portfolio with the right network architecture for client-to-campus data center cloud and AI (artificial intelligence) networking backed by three guiding principles. These include 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.
The Arista 2.0 strategy includes three components that are likely to drive growth over the next few years. The first component involves focused plans to invest in core businesses by rolling out new solutions and improved AI offerings. Secondly, Arista aims to emphasize more on software-as-a-service for improved revenue visibility. Last but not least, the company plans to enter adjacent markets to target a broader customer base.
Portfolio Strength Buoys ANET
Arista holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products. In addition, the company offers one of the broadest product lines of data center and campus Ethernet switches and routers in the industry. It provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency. The company also innovates in areas such as deep packet buffers, embedded optics and reversible cooling.
Arista is witnessing solid demand trends among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack. The versatility of Arista’s unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from other competitors in the industry. This has helped the company to record solid top-line growth over the years.
Image Source: Zacks Investment Research
ANET Gains From Cloud-Native Software Traction
Arista has made several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. It has introduced new cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services. This supports video conferencing applications like Google Hangouts, Microsoft Teams and Zoom.
The acquisition of Awake Security, a Network Detection and Response platform provider that combines AI with human expertise to autonomously hunt and respond to insider and external threats, has expanded its cognitive campus portfolio with new platforms. These include the 750 Series modular chassis and the 720 Series 96 port fixed switch. Arista has also announced unified edge innovations across wired and wireless networks for its Cognitive Campus Edge portfolio for Enterprise Workspaces and an enterprise-grade Software-as-a-Service offering for the flagship CloudVision platform.
Price Performance
The stock has surged 73% over the past year compared with the industry’s growth of 63.6%. It has also outperformed its peers like Juniper Networks, Inc. (JNPR - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) .
One-Year ANET Stock Price Performance
Image Source: Zacks Investment Research
Estimate Revision Trend of ANET
Earnings estimates for Arista for 2024 have climbed 18.4% to $2.19 over the past year, while the same for 2025 has increased 15.8% to $2.42. The positive estimate revision depicts optimism about the stock’s growth potential.
Image Source: Zacks Investment Research
End Note
With healthy revenue-generating potential driven by robust demand trends, Arista appears poised for solid growth momentum. Further, a strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. Solid traction from the Arista 2.0 strategy is a major tailwind. An uptrend in estimate revision further portrays positive investor sentiments.
Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed for further stock price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock.
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Can ANET Stock Sustain its Mojo With Arista 2.0 Strategy?
Arista Networks, Inc. (ANET - Free Report) is benefiting from the expanding cloud networking market, which is led by a strong demand for scalable infrastructure. In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance and programmability, enabling integration with third-party applications for network management, automation and orchestration.
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 boasts a comprehensive portfolio with the right network architecture for client-to-campus data center cloud and AI (artificial intelligence) networking backed by three guiding principles. These include 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.
The Arista 2.0 strategy includes three components that are likely to drive growth over the next few years. The first component involves focused plans to invest in core businesses by rolling out new solutions and improved AI offerings. Secondly, Arista aims to emphasize more on software-as-a-service for improved revenue visibility. Last but not least, the company plans to enter adjacent markets to target a broader customer base.
Portfolio Strength Buoys ANET
Arista holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products. In addition, the company offers one of the broadest product lines of data center and campus Ethernet switches and routers in the industry. It provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency. The company also innovates in areas such as deep packet buffers, embedded optics and reversible cooling.
Arista is witnessing solid demand trends among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack. The versatility of Arista’s unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from other competitors in the industry. This has helped the company to record solid top-line growth over the years.
Image Source: Zacks Investment Research
ANET Gains From Cloud-Native Software Traction
Arista has made several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. It has introduced new cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services. This supports video conferencing applications like Google Hangouts, Microsoft Teams and Zoom.
The acquisition of Awake Security, a Network Detection and Response platform provider that combines AI with human expertise to autonomously hunt and respond to insider and external threats, has expanded its cognitive campus portfolio with new platforms. These include the 750 Series modular chassis and the 720 Series 96 port fixed switch. Arista has also announced unified edge innovations across wired and wireless networks for its Cognitive Campus Edge portfolio for Enterprise Workspaces and an enterprise-grade Software-as-a-Service offering for the flagship CloudVision platform.
Price Performance
The stock has surged 73% over the past year compared with the industry’s growth of 63.6%. It has also outperformed its peers like Juniper Networks, Inc. (JNPR - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) .
One-Year ANET Stock Price Performance
Image Source: Zacks Investment Research
Estimate Revision Trend of ANET
Earnings estimates for Arista for 2024 have climbed 18.4% to $2.19 over the past year, while the same for 2025 has increased 15.8% to $2.42. The positive estimate revision depicts optimism about the stock’s growth potential.
Image Source: Zacks Investment Research
End Note
With healthy revenue-generating potential driven by robust demand trends, Arista appears poised for solid growth momentum. Further, a strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. Solid traction from the Arista 2.0 strategy is a major tailwind. An uptrend in estimate revision further portrays positive investor sentiments.
The stock delivered a trailing four-quarter average earnings surprise of 14.8% on average. Arista currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed for further stock price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock.