2024-06-04 15:55:27 ET
Summary
- Nvidia's Spectrum-X networking platform is superior to Arista's Ethernet networking solution in high-volume AI cases, leading to increased competition.
- The US presidential election in 2024 is expected to cause market volatility and potential risks for investors.
- The AI sector is likely to face a period of reassessment and negativity in 2025, posing risks for AI investors.
Summary
Whilst the artificial intelligence market offers wonderful long-term potential, there are some particularly worrying events unfolding in the short term, especially for Arista Networks ( ANET ), the subject of the note.
Nvidia’s recently improved Spectrum-X networking platform has specific advantages over Arista’s Ethernet networking offering. Consequently, Nvidia’s networking sales have grown from $925 million to $3.2 billion in just the past 12 months. Meanwhile, Arista has been growing networking sales at 37% annually and reached $5.9 billion in the year to December 2023. At this rate, Nvidia’s networking sales will comfortably surpass those of Arista during 2024. Cue increased competitive pressures on Arista through 2024....
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For further details see:
Arista Networks: Sell Before Oncoming Threats Crystallize