Arista Networks (ANET) on Monday reported second-quarter results that topped analyst estimates. ANET stock popped as the company’s outlook came in above views, amid investor angst over capital spending plans of customers such as Microsoft (MSFT) and Facebook-parent Meta Platforms (META).
X
For the three months ended June 30, Arista earnings climbed 46% to $1.58 per share, topping estimates of $1.44 per share. Also, revenue jumped 39% to $1.46 billion vs. forecasts for $1.38 billion.
A year earlier, Arista earnings were $1.08 a share on revenue of $1.05 billion. For the September quarter, Arista predicted revenue in a range of $1.45 billion to $1.5 billion. That topped estimates of $1.39 billion.
“In spite of the return to shorter lead times and reduced visibility, we are executing well with gradual incremental improvements to our 2023 outlook, which now calls for year-over-year growth in excess of 30%,” Chief Financial Officer Ita Brennan said in the company’s earnings release.
ANET stock jumped nearly 10% to 170.50 in extended trading on the stock market today. The company reported its results after the market close
In Monday’s regular session, shares rose 2.6%. Meanwhile, ANET stock holds an entry point of 178.36.
Arista stock had climbed nearly 25% in 2023 as of Friday’s market close. But that includes a 14% retreat in shares since July 25.
ANET Stock: Microsoft, Meta Biggest Customers
Arista’s biggest customers are Microsoft and Meta Platforms. Arista stock pulled back last week after Microsoft and Meta reported June-quarter results and updated capital spending plans.
Heading into the Arista earnings report, Arista stock owned a Relative Strength Rating of 76 out of a best-possible 99, according to IBD Stock Checkup.
Arista sells switches that speed up communications among racks of computer servers packed into data centers. Its chief rivals are Cisco Systems (CSCO) and Juniper Networks (JNPR).
Arista is among artificial intelligence stocks to watch. Some analysts expect ANET stock to get a boost as internet data centers require more computing power and network bandwidth to process AI workloads.
According to analysts, Arista is gaining ground in the so-called “enterprise” market, where it sells network gear to big companies.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
YOU MIGHT ALSO LIKE:
IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today
Learn How To Time The Market With IBD’s ETF Market Strategy
How To Use The 10-Week Moving Average For Buying And Selling
Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest