We recently published a list of Jim Cramer Latest Lightning Round: Top 10 Stocks to Watch. Since Arista Networks Inc (NYSE:ANET) ranks 4th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC talked about the latest rebound in the market.
Cramer said that the key reason the market roared to highs was strong earnings from top banks. He said since the Fed's interest rate cuts have just started, investors believe maybe the "best is yet to come."
Jim Cramer wondered whether this strong performance trend would be a "pattern" in this earnings season.
Cramer recommended investors to "listen to the calls" this earning season and "ponder a moment, and only then should you pull the trigger."
For this article, we watched the latest episodes of Jim Cramer's 'Lightning Round' segment on CNBC and picked 10 stocks he was talking about. With each company, we have mentioned its hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Talking about the best performers of the third quarter in a latest program on CNBC, Jim Cramer said:
The Information recently reported that Meta Platforms is preparing a cluster of over 100,000 NVIDIA H-100 GPUs to train the latest version of its Llama language model. Evercore ISI believes Arista Networks Inc (NYSE:ANET) is likely to be the networking partner for Meta Platforms' cluster. Ethernet will handle the networking for the project, as InfiniBand isn't capable of supporting a cluster of this scale, leading Evercore to believe Arista Networks Inc (NYSE:ANET) will supply some of the infrastructure.
Arista Networks Inc (NYSE:ANET) has previously worked with Meta, providing switches for a cluster with 24,000 GPUs. Daryanani noted that their strong relationship makes it likely Arista will supply the switches for this new cluster. If successful, this could boost Arista's $750 million AI revenue target for 2025. Evercore maintains an Outperform rating on Arista Networks Inc (NYSE:ANET) with a $400 price target.
What makes Arista Networks Inc (NYSE:ANET) a promising AI stock?
Arista Networks Inc (NYSE:ANET) is set to gain amid the AI-driven shift to high-speed networks due to its open Ethernet design and unified Arista EOS. The company's partnership with Broadcom also created an opportunity for Arista Networks Inc (NYSE:ANET) to expand its integrated software and hardware solutions.
Arista Networks Inc (NYSE:ANET) claims its Ethernet architecture based on merchant silicon allows fast deployment for major hyperscalers and Tier-2 cloud providers.
Madison Mid Cap Fund stated the following regarding Arista Networks, Inc. (NYSE:ANET) in its Q2 2024 investor letter:
Overall, Arista Networks Inc (NYSE:ANET) ranks 4th on Insider Monkey's list titled Jim Cramer Latest Lightning Round: Top 10 Stocks to Watch. While we acknowledge the potential of Arista Networks Inc (NYSE:ANET), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ANET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.