Arista Networks (ANET), our top pick in Technology-Communications Networks, is a leading supplier of cloud networking solutions for Internet companies, cloud service providers, and next-generation data centers, says James Kelleher, senior analyst at Argus Research.
After 100%-plus growth in cloud titan spending in 2022, Arista initially expected this category to slow in 2023.The arrival of generative AIs such as ChatGPT and Bard, however, has led to accelerating growth in cloud-based data center networking in support of large language models (LLMs).
As the leader in enterprise and data center cloud networking, Arista is uniquely positioned to benefit from this unfolding opportunity. Having navigated the supply-chain crisis, Arista is now successfully managing through macroeconomic weakness, customer caution, cost inflation, and lingering supply issues.
Arista is now seeing strength in most customer verticals, including cloud titans and enterprise data center clients. Arista has supplemented its focus on cloud, carrier, and large-enterprise customers with products for the campus and mainstream switching market, which is now evolving to a distributed workplace environment.
The company early in 2023 offered its first WAN routing solution, which further expands the available TAM. The company is financially strong and cash is growing rapidly. Arista in our view appears positioned for sustained annual revenue and EPS growth in 2024 and beyond.