TSP Weekly Tech Stock Update—May 3, 2025
This Week: MSFT/TEAM earnings reviews, HUBS earnings preview, Palo Alto buys Protect AI, MDB gets a new CFO, ZS hits new 52-week high, ANET rebounds, Mizuho bullish on OS, Seaport likes AVGO & more.
Hello from Rob…
—Arista Networks (ANET, $91.02) shares this week rebounded nearly 17% ahead of the release of Q1 results on Tuesday, May 6.
On Friday, the stock rose for the ninth session in a row as it works to recover after falling 55% from the record high of $133.57 reached on January 24 to the new 52-week low of $59.43 on April 7.
On Wall Street, there are now widely divergent views on Arista. Last month, Morgan Stanley lowered its price target to $73 from $118, saying tariffs add more uncertainty into the networking spending market. However, Evercore ISI added Arista to its “Tactical Outperform” list with a target of $100 (down from $130), saying it thinks the company is well-positioned to maintain the revenue guidance previously issued.
Arista CEO Jayshree Ullal has called out the incredible amount of bandwidth capacity and high network speeds datacenters demand for both front-end and back-end storage, compute and AI zones. She sees an inflection in AI networking, with Ethernet emerging as a critical infrastructure across both front-end and back-end AI datacenters.
The company’s core cloud and AI datacenter products are deployed across multiple Gigabit Ethernet speeds (ranging from 10G to 800G), delivering power efficiency, high availability and automation. This product lineup drives about 65% of the company’s total revenue. Arista continues to gain market share, particularly in the 100G, 200G and 400G offerings. At the end of 2024, Arista’s 400G customer base totaled around 1,000.
Arista expects 800G Ethernet to emerge as an AI back-end cluster this year. Ullal previously said the company remains optimistic about achieving its 2025 total AI revenue goal of $1.5 billion, including $750 million of AI back-end clusters. For 2025, three Cloud Titan customers are taking their AI cluster build-outs into production, deploying 100K GPUs cumulatively. Also, Arista has said it is committed to its goal of $750 million in 2025 revenue from its enterprise campus products.
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