Arista Networks (ANET) on Tuesday reported first quarter earnings and revenue that topped consensus estimates and announced a new $1.2 billion stock buyback. Guidance for Arista stock came in slightly above Wall Street targets.
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The maker of cloud computing network gear reported its results after the market close.
On the stock market today, Arista stock rose more than 7% to 295.01 in extended trading. Arista is among artificial intelligence stocks to watch.
Arista Stock: Guidance Slightly Above Views
For the three months ended March 31, Arista earnings rose 39% to $1.99 per share. Also, revenue jumped 16% to $1.57 billion.
Analysts estimated Arista earnings per share of $1.74 on an adjusted basis with revenue of $1.55 billion. A year earlier, Arista earnings were $1.43 per share on revenue of $1.35 billion.
For the current quarter ending in June, Arista predicted revenue of $1.635 billion at the midpoint of guidance, edging by estimates of $1.62 billion.
Analysts expect revenue growth for Arista stock to slow to 12% in 2024 from nearly 34% in 2023.
Heading into the earnings report, ANET stock had advanced 99% over the past year and 17% in 2024.
Also, Arista’s biggest customers are Microsoft (MSFT) and Facebook-parent Meta Platforms (META). Newer customers include Oracle (ORCL) and Google-parent Alphabet (GOOGL).
ANET stock holds a Relative Strength Rating of 92 out of a best-possible 99, according to IBD Stock Check-up.
Arista sells computer network switches that speed up communications in internet data centers. Further, its chief rivals are Cisco Systems (CSCO) and Juniper Networks (JNPR).
Artificial Intelligence Upside Expected
According to analysts, Arista is gaining ground in the so-called “enterprise” market — large companies, government agencies and educational institutions.
By 2025, some analysts expect ANET stock to get a boost from customer investments in artificial intelligence infrastructure. Internet data centers will need more computing power and network bandwidth to process AI workloads.
Arista management has forecast $750 million in AI-related sales for 2025.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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