Latest news with #EOS
Yahoo
5 days ago
- Business
- Yahoo
Better Tech Stock: Arista Networks vs. Cisco Systems
Arista is growing rapidly as it dominates the cloud and hyperscale markets. Cisco's 'one stop shop' to networking is still locking in plenty of enterprise customers. Both companies will benefit from the cloud and AI boom. 10 stocks we like better than Arista Networks › Arista Networks (NYSE: ANET) and Cisco Systems (NASDAQ: CSCO) represent two different ways to invest in the networking infrastructure and software market. Arista is a smaller, higher-growth player focused on data centers and cloud-scale networks, while Cisco is the more diversified market leader serving a wider range of sectors. Over the past five years, Arista's stock rallied nearly 540% as Cisco's stock advanced about 50%. The S&P 500 rose more than 90% during that period. Let's see why Arista consistently outperformed its larger rival and the broader market, and if it's still the better buy. Cisco is the largest networking hardware company in the world, but it's known for locking its customers into its proprietary chips and software. It reinforces the stickiness of that ecosystem with its integrated security, cloud, and network observability services. Arista takes the opposite approach and primarily uses Broadcom's chips with its open source software and application programming interfaces (APIs). That flexibility makes it appealing to customers which don't want to get stuck in Cisco's walled garden. Arista's use of a single modular operating system, EOS, often makes it a simpler alternative to Cisco's fragmented ecosystem of different operating systems (including IOS, NX-OS, IOS XE). Arista's low-latency switches are also optimized for hyperscale cloud networks, which makes it a top choice for tech giants like Meta and Microsoft, while its CloudVision platform allows its clients to easily monitor and analyze their deployments. Arista might initially seem like an existential threat to Cisco, but Cisco remains the leader in end-to-end deployments which bundle together campus, branch, wide-area networking (WAN), and data center solutions. Cisco's integrated cybersecurity and collaboration features can also reduce the need for additional third-party services, while its proprietary chips are better optimized for its own hardware and software than third-party chips. In other words, Cisco is a "one stop shop" for networking solutions, while Arista still mainly provides a narrower range of products and services for the cloud and data center markets. From fiscal 2019 to fiscal 2024 (which ended last July), Cisco's revenue grew at a compound annual growth rate (CAGR) of less than 1% as its adjusted EPS rose at a CAGR of nearly 4%. During those five years, Cisco struggled with three major challenges. First, the pandemic reduced enterprise and campus orders and disrupted supply chains. Second, its supply chain problems dragged on after the pandemic ended. Lastly, its customers ramped up their orders again as it resolved those production issues in fiscal 2023, but rising rates and other macro headwinds throttled the actual deployments. As a result, customers ended up with too many uninstalled products and Cisco's orders slowed. As Cisco slogged through those challenges, it acquired Acacia Communications in 2021 to expand its portfolio of optical networking products. It also bought ThousandEyes in 2020 and Splunk in 2024 to expand its network observability services. Those acquisitions should diversify Cisco's business away from its core routers and switches. From 2019 to 2024, Arista's revenue rose at a CAGR of 24% as its adjusted net income rose at a CAGR of 30%. But during those five years, a stock split and rising stock-based compensation expenses reduced its adjusted EPS at a negative CAGR of 1%. Arista fared better than Cisco during the pandemic, because its core cloud and hyperscale customers continued growing through that crisis. Arista also experienced milder supply chain disruptions than Cisco, since Arista had a tighter portfolio and mainly relied on Broadcom for its chips, and it didn't suffer the same backlog issues as its supply chains normalized. Arista also made a few acquisitions over the past five years, including Awake Security in 2020 (to challenge Cisco in the security market) and the edge networking company Pluribus in 2023. Those deals weren't nearly as big as Cisco's, but they're gradually expanding Arista's ecosystem. From fiscal 2024 to fiscal 2027, analysts expect Cisco's revenue and EPS to grow at a CAGR of 5% and 9%, respectively. That growth should be driven by the expansion of its subscription and services, AI tailwinds for its networking infrastructure business, rising demand for its security and observability services, and the normalization of its hardware backlog. That's a solid growth trajectory for a stock which trades at 17 times forward adjusted earnings while paying a forward dividend yield of 2.5%. From 2024 to 2027, analysts expect Arista's revenue and EPS to increase at a CAGR of 19% and 15%, respectively. Arista should benefit from the growth of the cloud and AI markets, its expansion into the enterprise and campus markets to challenge Cisco, and the expansion of its integrated security services. That's a rosy outlook, but Arista's stock is a bit pricier at 33 times its forward adjusted earnings -- and it's never paid a dividend. Cisco and Arista are both promising long-term investments. But if I had to choose one, I'd stick with Arista because it's growing faster, it stock is still reasonably valued, and it's well-poised to disrupt Cisco over the long term. Before you buy stock in Arista Networks, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Arista Networks wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Leo Sun has positions in Meta Platforms. The Motley Fool has positions in and recommends Arista Networks, Cisco Systems, Meta Platforms, and Microsoft. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Better Tech Stock: Arista Networks vs. Cisco Systems was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-06-2025
- Business
- Yahoo
Arista Networks (ANET) Names Todd Nightingale as New President and Chief Operating Officer
Arista Networks Inc (NYSE:ANET) is one of the 11 must-buy AI stocks analysts are betting on. On June 16, the company announced the appointment of Todd Nightingale as its President and Chief Operating Officer, effective July 1, 2025. Nightingale brings extensive industry experience, having served as CEO of Fastly and held key leadership roles at Cisco Systems, including overseeing its Enterprise Networking and Cloud division. His expertise is expected to contribute significantly to Arista's growth. A data center filled with the latest servers and networking equipment representing the company's cutting edge security infrastructure. Under his employment agreement, Nightingale will receive a $350,000 annual salary, a prorated 2025 bonus, and eligibility for discretionary bonuses in 2026. His compensation package includes $30 million in restricted stock units (RSUs) and $2 million in performance-based stock units (PSUs), pending corporate approvals and vesting requirements. Arista continues strengthening its leadership team with strategic appointments as it reports 22.3% revenue growth over the past year. Nightingale's role is set to accelerate Arista's innovation and operational efficiency in the networking space. Arista Networks Inc. (NYSE:ANET) provides client-to-cloud networking solutions for AI, data center, campus, and routing applications. Its offerings include the EOS platform, network applications, and support services, delivered through both direct and partner channels. While we acknowledge the potential of ANET as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 12 Best Healthcare Stocks to Buy Now and 10 Stocks Analysts Are Upgrading Today. Disclosure: None.
Yahoo
15-05-2025
- Business
- Yahoo
Arista Rises 18.8% in a Year: Should You Bet on the Stock Now?
Arista Networks, Inc. ANET has increased 18.8% over the past year compared with the communication components industry's growth of 40.5%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500's growth of 11.9% and 11.2%, respectively. Image Source: Zacks Investment Research The company has outperformed its peer, Juniper Networks, Inc. JNPR, but underperformed relative to Cisco Systems, Inc. CSCO. Juniper has gained 4.5%, while Cisco has surged 34.1% during this period. Arista is steadily expanding its portfolio to match the ever-growing demand for modern AI infrastructure. It is witnessing solid demand among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack. It has introduced Cluster Load Balancing, a sophisticated network load-balancing solution integrated into Arista EOS. The solution streamlines the management of large flows of data across network latest Arista Etherlink AI Platforms are capable of supporting ultra-fast data rates (800G/400G). It can efficiently support small AI clusters as well as large deployments with 100,000+ accelerators. NVIDIA's NVDA GPU roadmap focuses on pushing the boundaries of high-performance computing and supporting data centers with next-generation capabilities. NVIDIA's upcoming Blackwell Ultra GPUs are likely to provide up to 25X the token throughput for AI inference compared to Hopper 100. To connect these GPUs in AI clusters, enterprises need networks with ultra-low latency and extremely high throughput. Arista is actively aligning its innovation strategy with such emerging technology trends. Backed by strong momentum in cloud and AI networking solutions, the company is expected to generate $750 million in front-end AI revenues in 2025. In the first quarter, Arista generated net cash flow of $641.7 million from operations, up from $513.8 million a year ago. Healthy growth in cash flow indicates efficient working capital management. As of March 31, 2025, the company had $1.84 billion in cash and cash equivalents and $257.8 million in other long-term liabilities. At the end of the first quarter of 2025, ANET reported a current ratio of 3.93, way above the industry's average of 1.48. A current ratio above 1 suggests that a company is well-positioned to meet its short-term obligations. Such a strong liquidity position will allow Arista to steadily invest in growth initiatives and expand opportunities across several end markets. Growing geopolitical and trade uncertainty remains a major concern for Arista. The recent decision by the United States and China to temporarily reduce reciprocal tariffs for a period of 90 days is a positive. However, if the countries fail to reach a resolution and tariffs are imposed again, this will have a negative impact on Arista's gross margin. Amid such uncertainty, the company has ramped up its inventory to create a supply chain buffer. This reduces the availability of capital for strategic investments as a higher part of the capital is locked in the company is facing intense competition from Cisco in the cloud network solution market. In the network equipment market, Juniper is a major competitor. To fend off the competition, the company has to steadily invest in enhancing its existing product line and developing new technologies. This is weighing on the margin. In the first quarter of 2025, total operating expenses were $417.3 million, up from $341.2 million in the year-ago quarter. Research & development costs rose to $266.4 million from $208.4 million. Image Source: Zacks Investment Research ANET is currently witnessing an uptrend in estimate revisions. Earnings estimates for 2025 have jumped 3.64% to $2.56 over the past 60 days, while the same for 2026 has increased 1.73% to $2.94. The positive estimate revision portrays bullish sentiments about the stock's growth potential. Image Source: Zacks Investment Research The company is aiming to become the core network backbone for next-generation AI clusters. Arista is placing strong emphasis on expanding its Etherlink portfolio and developing cutting-edge features focused on maximizing AL cluster efficiency. NVIDIA's GPU roadmap presents a solid growth opportunity for the company. Strong balance sheet and healthy growth in cash flow are positive factors. Upward estimate revision underscores growing investors' rising operating expenses and fierce competition are weighing on the bottom line. Sino-U.S. trade uncertainty remains a major concern. Despite some near-term challenges, Arista is poised to gain from solid AI traction, and investors are likely to profit in the long run if they bet on this stock delivered a trailing four-quarter average earnings surprise of 11.82%. Arista currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report Juniper Networks, Inc. (JNPR) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Arista Networks, Inc. (ANET) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
1 Stock-Split AI Stock Up 2,330% Since 2015 to Buy Now, According to Wall Street
Arista shares have declined 12% since announcing a 4-for-1 stock split in November, but stocks have returned an average of 25% during the year following such announcements. The company is the market leader in high-speed Ethernet switches, and demand for its products should increase as more businesses build out artificial intelligence (AI) infrastructure. Wall Street expects Arista's earnings to increase at 16% annually through 2028, but the company has consistently beat the consensus estimate in recent quarters. 10 stocks we like better than Arista Networks › Arista Networks (NYSE: ANET) stock has soared 2,330% since January 2015. But shares have declined 12% since the company announced a 4-for-1 stock split on Nov. 7. Investors have two reasons to think the price is headed higher in the coming months. First, since 1980, companies have seen their share prices increase by an average of 25% during the year after a stock split announcement, according to Bank of America. Second, Wall Street anticipates healthy returns for Arista shareholders during the next year. The average 12-month target price is $108 per share, which implies 13% upside from its current share price of $95. Here's what investors should know about this artificial intelligence (AI) stock. Arista specializes in high-performance networking solutions for enterprise campus and cloud data centers. The company complements its hardware portfolio, including switches and routers, with adjacent software for network automation, monitoring, and security. Research company Gartner recently recognized Arista as the technology leader in data center switches. The report highlighted its consistent innovation, product roadmap, and network management software as key strengths. Arista has differentiated itself with its Extensible Operating System (EOS). Whereas Cisco deploys multiple operating systems across different devices, making network management more complicated, Arista EOS runs across its entire product portfolio, letting customers deploy a seamless network that spans public, private, and hybrid clouds. Importantly, Arista dominates the high-speed Ethernet switch market, meaning switches that transfer data at 100-plus gigabits per second. The company captured about 43% market share last year, three times more than its closest competitor Cisco. Leadership in that segment means Arista is well positioned to benefit as AI creates demand for faster networking solutions. A data center network has two distinct components: the front end and back end. The front end of a network moves traffic between endpoint (user-facing) devices and servers, while the back end of a network moves traffic between servers. At present, Ethernet is the industry standard in front-end networking for AI workloads, while InfiniBand is the industry standard in back-end networking for AI workloads. However, Arista expects Ethernet switches to become an increasingly popular choice for back-end networks in the coming years. "We naturally see the deployment of more back-end clusters resulting in more uniform compute, storage, and memory," CEO Jayshree Ullal told analysts last year. That puts Arista in front of a large market opportunity. Bloomberg estimates AI-related Ethernet switch sales for front-end and back-end networks will grow at 41% annually and 51% annually, respectively, through 2028. In that scenario, cumulative spending in those areas would exceed $9 billion in three years. Comparatively, Arista estimates AI sales will total $1.5 billion in 2025. That figure could double or even triple by 2028 because the company dominates the Ethernet switch space. Wall Street estimates Arista's earnings will increase at 16% annually through 2028. That makes the current valuation of 38 times earnings look somewhat expensive. However, analysts have consistently underestimated the company. Arista topped the consensus earnings estimate by an average of 14% in the last six quarters. And that trend may continue as demand for AI networking increases. Importantly, Arista stock closed near $108 per share on Nov. 7, the day the company announced its 4-for-1 stock split. History says the share price will advance 25% to $135 during the subsequent year, which implies 42% upside from its current share price of $95. But that may be unrealistic, given the economic uncertainty created by President Trump's tariffs. However, patient investors should consider buying a small position in this AI stock today. Before you buy stock in Arista Networks, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Arista Networks wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $598,613!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $753,878!* Now, it's worth noting Stock Advisor's total average return is 922% — a market-crushing outperformance compared to 169% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Bank of America is an advertising partner of Motley Fool Money. Trevor Jennewine has positions in Arista Networks. The Motley Fool has positions in and recommends Arista Networks, Bank of America, and Cisco Systems. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy. 1 Stock-Split AI Stock Up 2,330% Since 2015 to Buy Now, According to Wall Street was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
13-05-2025
- Business
- Business Times
Carriers moving MRO work outside China even before tariff chaos: SIA Engineering
[SINGAPORE] There has been little to no impact from tariffs on SIA Engineering Company's (SIAEC) operations for now, but these are still early days, said chief executive officer Chin Yau Seng in a briefing on Tuesday (May 13). It has been just 42 days since the 'Liberation Day' tariffs were launched and the company is monitoring the tariffs and their impact. SIAEC will be looking into the structure of contracts with the view of passing on the costs to its customers. 'We are monitoring the situation, I think no one really knows how all these things will finally play out in what form,' he said. As the tariffs have yet to make a price impact, SIAEC has yet to see airlines moving their maintenance, repair and overhaul (MRO) work in China to other Asian markets. But carriers have been seeking to diversify their MRO bases overseas even before the tariffs, said Chin. 'We have been in conversation with some of them over the course of the past few years, we do have US carriers among our customers, so perhaps that's one opportunity, but we will continue conversations to see where they take us,' he said. For financial year 2025 ended Mar 31, the increase in SIAEC's expenditure was driven mainly by material and subcontract costs. Material costs have increased 32.8 per cent to S$272 million for FY2025 from S$204.8 million in FY2024. Subcontract costs have increased 36.6 per cent on the year to S$150.1 million from S$105.9 million. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up While material costs are passed through to customers, subcontract costs might not be passed through to customers depending on the contract. While material costs have been affected by inflation and supply chain issues, the rise in subcontract costs stems from the increase in volume and a rate increase that occurred in FY2025. 'We've taken the hit this past financial year, but going forward, we've locked in the contract for the three years, if there was one big jump it was in the past year already,' said Chin. Looking ahead, SIAEC is implementing a new enterprise operating system (EOS), which will increase efficiency and consistency across its MRO operations. With demand from airlines maxing out the capacity at the company's hangars, this EOS is expected to aid in forecasting and planning to eke out spare capacity to sell, among other improvements. SIAEC will work closely with its customers as part of the EOS to plan for aircraft checks. From the predictability of check induction to the availability of spares, these are some factors the EOS will consider in ensuring that the company can be more efficient in delivery timelines for maintenance checks. 'The more predictable you are, the better you are in knowing there's spare capacity that's freed up that you can sell, that will translate to revenue,' said Chin. As airlines operate their aircraft for longer, SIAEC will be leveraging its knowledge gained from maintaining airframes such as the A350 and A380, as well the Boeing 787 and 777. The company has moved up the learning curve, with Chin pointing out that the A350 checks go out on a timely basis. 'You're actually getting deeper and deeper into the aircraft life cycle and therefore you expect to have a higher work content and more things to do on the ground, and that we will continue to be at the forefront to try keep developing capabilities and making sure we are among the best MROs handling these aircraft,' he said.
