Needham: 100G upgrade cycle is a boon for Arista Networks

Jun. 12, 2017 5:07 PM ETArista Networks, Inc. (ANET)CSCO, ANETBy: Jason Aycock, SA News Editor1 Comment
  • Arista Networks (ANET +0.2%) is set to take particular advantage of the shift to 100G bandwidth connections vs. competitors like Cisco Systems (CSCO -0.4%), Needham & Co. says in an update to its coverage.
  • "We strongly believe the acceleration of the transition to the higher speed architecture is hitting the inflection point this quarter," writes analyst Alex Henderson. "ANET’s share in 100G is substantially higher than its overall market share and as the move from 10G/40G to 25G/100G accelerates, it's driving acceleration in Arista's share gains and revenues."
  • Arista is "one of those exceptional companies that can grow 25-35% annually for an extended period of time," not unlike the tech sector's initialism-based high flyers, but with some resistance to sell-offs like the current one: "While we believe ANET is a baby FAAMNG stock, we believe its core fundamental acceleration is relatively unique. We expect robust upside to estimates across CY17 and into CY18."
  • The firm boosted its price target to $175 from $162, implying near-17% upside from today's close.

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