CSCO - Arista Networks: Nvidia Isn't The Only AI Gold Rush Beneficiary

2024-07-08 08:30:30 ET

Summary

• Arista Networks investors saw ANET surge to a new high in July.
• ANET's 130% total return over the past year has outperformed the S&P 500 significantly.
• Arista's focus on scalability and reliability in AI networking infrastructure can help ANET gain more share against Nvidia's InfiniBand.
• The company's AI center aims to address network silos, broadening its opportunities in back-end AI infrastructure.
• I explain why investors considering diversifying from Nvidia can assess ANET's thesis as a top-notch AI growth play. Read on.

Arista: High-Speed AI Networking Infrastructure Leader

Arista Networks, Inc. ( ANET ) stock has powered to a new high in July 2024 as the high-speed networking leader has continued to defy gravity. In my bullish ANET update in early May 2024, I upgraded ANET as I discussed why I had understated its potential. ANET has not disappointed, gaining almost 45% through last week's highs, easily outperforming the S&P 500 ( SPX ) ( SPY ) over the same period. ANET's 1Y total return of nearly 130% has corroborated the market's confidence in its AI networking growth prospects. Compared to arch-rival Cisco ( CSCO ) stock's -6.5% total return over the past year, it's increasingly clear which company benefited significantly from the AI gold rush....

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