Is Arista Networks Inc (ANET) The Best Hardware Stock To Buy Now?
The computer hardware industry comprises personal computers, PC peripherals, storage devices, and servers for the high-growth data center industry. According to a report by The Business Research Company, the computer hardware industry was valued at $714.8 billion in 2024 and is expected to grow at a compound annual growth rate of 6.5% to reach $761 billion by 2025. The market is expected to expand further at a CAGR of 6.3% to reach $972 billion by 2029 eventually. The historic growth factors including the globalization of the supply chain, the rise of the internet, and the revolution in personal computing are still valid. It has been further boosted by the latest trends such as edge and quantum computing, the rise of AI and data centers, and hybrid and multi-cloud environments.
The global PC market is one of the largest components of the hardware industry. According to a January 9 report by IDC, the PC shipments grew 1.8% during Q4 of 2024, with global volumes reaching 68.9 million. Jitesh Ubrani, a research manager at IDC Worldwide Mobile Device Trackers noted that overall the market is experiencing slower growth, however, the fourth quarter was aided by the Chinese government subsidies. The report also pointed out increased concern regarding the increased threats of new tariffs back in January 2025, noting that many brands experienced pull-ins during December as a preventive measure to get ahead of the tariffs.
However, a more recent report published by IDC on April 8, revealed that the PC shipment market remained unaffected by the tariffs as the shipments grew by 4.9% during the first quarter of 2025. Jean Philippe Bouchard, research vice-president with IDC's Worldwide Mobile Device Trackers noted that these increased shipments were largely a result of the entire ecosystem trying to accelerate the deliveries to avoid the first round of tariffs. He noted that although the market remained largely unaffected by the first round, however, the second round announced on April 2 could lead to an inflationary impact, thereby negatively impacting the shipments in the following quarters.
To curate the list of the 10 best hardware stocks to buy now, we used the Finviz stock screener and Insider Monkey's Q4 2024 hedge funds database. Firstly, we aggregated a list of computer hardware stocks using the screener and sorted the list by market capitalization. Next, we ranked these stocks in ascending order of the number of hedge fund holders.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ().
A technician in a server room managing a large-scale network of computers.Arista Networks Inc (NYSE:ANET) is a leading data-driven cloud networking company that provides technologies for large-scale data centers, campus environments, and routing systems. It operates through Core Networking Systems, Cognitive Adjacencies, and Network Software and Solutions. Its products range from high-speed ethernet switching platforms to Campus wired/wireless products.
In fiscal 2024, Arista Networks Inc (NYSE:ANET) generated $7.03 billion in revenue, reflecting a 19.5% increase year-over-year. The company's cloud segment contributed around 48% to the annual revenue, whereas the core AI and data center products grew the annual revenue by around 65%. Notably, management shared that Meta has deployed its Arista 7700R4 Distributed Etherlink Switch for its latest Ethernet-based AI cluster. In addition, the company also introduced Switch Aggregation Group capability to its Arista EOS, which is used as an industry-standard Ethernet to group and manage switches.
Moreover, on April 8, Morgan Stanley analyst Meta Marshall maintained a Buy rating on the stock with a price target of $73. It is one of the best hardware stocks to buy now.
Artisan Global Opportunities Fund stated the following regarding Arista Networks Inc (NYSE:ANET) in its Q4 2024 investor letter:
'Along with NovoNordisk, a notable trim in the quarter included Arista Networks Inc (NYSE:ANET). Arista Networks is the market leader in cloud networking equipment used in data centers. Shares have strongly outperformed since the beginning of 2023 as its ethernet options capture market share in AI cloud environments. Many of the largest buyers in this space are focused on utilizing Arista's networking technology, given meaningful increases in GPU utilization rates versus InfiniBand, the out-of-the-box solution from NVIDIA. We believe Arista remains exceptionally well positioned. However, we have been trimming the position due to our valuation discipline.'
Overall, ANET ranks 2nd on our list of best hardware stocks to buy now. While we acknowledge the potential of ANET to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ANET but that trades at less than 5 times its earnings, check out our report about the .
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Disclosure: None. This article is originally published at .
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