Arista Networks Inc (ANET)

Arista Network Inc (ANET) stock plummeted by 8.55% due to concerns that its growth in artificial intelligence-driven data center network switches could be hindered by chipmaker Nvidia (NVDA), according to a Rosenblatt Securities analyst who downgraded Arista stock to sell. On the stock market, Arista stock plunged 8.6% to close at 271.22.

• Arista's AI Sales Forecast and Competition with Nvidia: Arista management has forecast $750 million in AI-related sales for 2025, with a significant portion coming from Ethernet network switches. In July, Arista joined with Cisco Systems (CSCO), Hewlett Packard Enterprise (HPE), and other companies to form the Ultra Ethernet Consortium. Ethernet network switches compete with Nvidia's InfiniBand chips, which transfer data from computer servers to storage devices. Nvidia acquired InfiniBand chipmaker Mellanox for $6.9 billion in 2020 but has also been developing Ethernet network switches as a precaution.
• Rosenblatt Securities Analysis and Future Outlook: Rosenblatt Securities analyst Mike Genovese lowered his price target on Arista stock to $210 from $330, citing concerns about Nvidia's dominance in the data center market. He believes that as Ethernet gains momentum, "most of the spoils will go to Nvidia" rather than Arista. Genovese stated, "Arista says it expects at least $750 million in new AI-related sales in 2025.

Arista Networks Stock (ANET) dropped by 8.74% from $186.09 to $169.82 in the trading on Thursday October 26, 2023. The reason why ANET stock down today is due to 2024 capital spending guidance from Meta Platforms. Arista, a cloud networking pioneer, is a large supplier to Meta Platforms. Therefore, as Meta's spending goes, so goes the revenue trajectory of Arista. Last night, Meta reported a rather conservative outlook for growth and spending, sending its key suppliers' stock, Arista, down. Meta expects to spend in a range of $30 billion to $35 billion. At the midpoint of $32.5 billion, that was below consensus estimates of $33.8 billion.