Arista Networks Outpaces Nvidia And Apple In Three-Month Performance

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Arista Networks Outpaces Nvidia And Apple In Three-Month Performance
Credit: © Reuters.

Cloud networking software maker, Arista Networks (NYSE: ANET ), has been on an impressive run, outperforming tech giants Nvidia (NASDAQ: NVDA ) and Apple (NASDAQ: AAPL ) over the past three months. The company's stock has increased 8.67% in this period, maintaining a position above the 50-day moving average line. This trend has led to Arista leading in the computer networking sub-industry, with an inflow of $9.95 billion from 706 institutional investors.

With a market capitalization of $59.10 billion, Arista forms part of the S&P 500 index and has surpassed other S&P technology stocks on both a three-month and year-to-date basis. The company's stock has seen a significant year-to-date increase of 53.70%.

Arista specializes in high-performance cloud networking solutions, integrating AI-driven technologies into its offerings for automation and optimization tasks. This approach seems to be paying off as the company has exhibited earnings growth between 21% to 72% over the past eight quarters and revenue growth between 24% to 57%. Notably, Arista's three-year revenue growth rate stands at 35%, while its three-year earnings growth rate is at 39%.

Earlier this year, as part of its strategic initiatives, Arista launched an AI-driven network identity service targeting enterprise security and IT operations, with a particular focus on the healthcare industry. This move aligns with their financial performance and appears to be contributing to their growth.

AI technology, similar to that used by Nvidia, Alphabet (NASDAQ: GOOGL ), and Microsoft (NASDAQ: MSFT ), is a key driver behind Arista's performance. Despite this impressive performance, investors are advised to wait until after the company's earnings report on October 30 before purchasing shares. Analysts project earnings of $1.58 per share on revenue of $1.48 billion — year-over-year increases — but a whisper number of $1.64 per share suggests a potential for higher earnings.

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