VenkatP
Physician, Growth & Value Stock Investor
Arista Networks, Interactive Brokers and Halozyme combine solid current earnings with strong future growth, a mix that may offer the best balance while value leads. With 10- and 30-year yields near historic highs, value is outperforming growth and growth investors are somewhat lost, but growth can return quickly. x.comÂ
Arista Networks' accelerating revenue and gross profit against relatively flat operating expenses make existing shares hard to sell, and the AI revolution could take them higher down the road. EPS growth is strengthening. After a 20-fold run, P/E expansion from 25 to 58 and P/S from 8 to 22 leave it too expensive to enter now, though the valuation looks justified; the best gains may be over. If growth slows, prolonged consolidation is possible. x.comÂ
Rising bond prices and falling yields favor low-volatility and dividend stocks over higher-beta, overcrowded growth. The chart shows the high-beta/low-volatility ratio falling as long-dated Treasuries rebound, countering high beta's earlier rate-driven lead. x.comÂ
Arista Networks is an AI name that has not yet gone parabolic, so it may have one more high, around $200, before the price runs too far ahead of fundamentals. It is a solid 30% grower facing margin headwinds from supply bottlenecks, and its valuation is rich versus its two-year average but not aggressively so. x.comÂ
Arista Networks' excellent Q2 shows quality wins in the end. Revenue of $3.0B beat the $2.82B Bloomberg consensus and grew 38% year on year, while adjusted EPS of $1.02 beat $0.88 and grew 40%. x.comÂ
Arista Networks could attract institutions that missed the optical rally, because it trades at cheaper multiples than other networking names. It was left behind in the latest optical surge, yet the viability of linear pluggable optics is still questionable and Arista retains a massive traditional Ethernet business. The stock is strong, about a point from its all-time high, and widely followed on the Street. x.comÂ
Arista Networks is a great, not widely known way to gain exposure to AI networking. It makes high-performance networking equipment and software that move data across data centers, cloud infrastructure, campus networks and AI clusters, used by hyperscalers, cloud companies and enterprises that need fast, reliable, programmable networks. x.comÂ
Arista Networks stands to benefit as Nvidia's earnings showed networking is the next leg up in AI spending. x.comÂ
Arista Networks continues to execute at an elite level, with revenue growth above 30%, operating margins above 42% and accelerating EPS, the profile of a high-quality compounder. x.comÂ
Arista's very strong earnings show why averaging up during selloffs deserves little hesitation. x.comÂ
Arista Networks posted a good quarter, so its selloff should bounce back as others have. Q1 revenue grew 35%, beating expectations, non-GAAP EPS rose to $0.87 from $0.66, and it guides Q2 revenue to about $2.8B with 46-47% operating margins and EPS of about $0.88. It also launched XPO optics to cut rack and floor space in AI data centers. x.com x.comÂ
