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AI demand helped Arista bag a contract from Meta Platforms during Q4 – the Mark Zuckerberg-led company deployed Arista’s Ethernet switch for its latest AI cluster.
Shares of Arista Networks Inc. (ANET) soared nearly 4% on Tuesday after the company’s fourth-quarter (Q4) results beat Wall Street estimates on both the earnings and revenue fronts.
Arista posted earnings per share (EPS) of $0.65 in Q4, beating consensus estimates of $0.57. Its revenue was $1.93 billion, slightly ahead of an estimated $1.9 billion.
However, the Santa Clara, California-headquartered company witnessed some margin pressures during the quarter. Its gross margins fell to 64.2% in Q4, compared to 65.4% during the same period last year.
It expects margins to fall to 63% during the first quarter (Q1) of fiscal year 2025.
For the full fiscal year 2024, Arista’s revenue crossed the $7 billion mark, surging 19.5% compared to 2023. Its FY24 EPS stood at $2.27, compared to $1.73 a year ago.
Artificial intelligence (AI) demand helped Arista bag a contract from Meta Platforms Inc. during Q4. The Mark Zuckerberg-led company deployed Arista’s Ethernet switch for its latest AI cluster, the cloud networking firm said.
“These results generated over 95% year-over-year growth in operating cash flow for the quarter, allowing us to continue to invest in strategic initiatives such as the AI and Campus markets,” said Chantelle Breithaupt, Arista’s CFO.
Some of Arista’s other wins during 2024 include its collaboration with AI bellwether Nvidia Corp., the launch of its Wi-Fi 7 access points, a partnership with Alabama Fiber Network, and the launch of a few other networking solutions.
Arista guided for revenue in the range of $1.93 billion and $1.97 billion in Q1, while the consensus stood at $1.91 billion.
Retail users on Stocktwits were upbeat on Arista after its Q4 performance, with sentiment soaring to enter the ‘extremely bullish’ (91/100) territory from ‘neutral’ (50/100) a day ago. Message volumes similarly skyrocketed.
One user said the Arista stock could be headed to the $130-$150 levels soon.
Arista Networks’ stock has been rising recently, gaining over 26% in the past six months. Its one-year gains have been even more impressive, with a rise of more than 71%.
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