Why Arista Networks Stock Is Soaring Today

Arista Networks (ANET +3.02%) stock is making big gains in Friday’s trading. The networking-technology company’s share price was up 5.4% as of 3 p.m. and had been up by as much as 10.1% earlier in trading.

Arista Networks’ valuation is moving higher thanks to the company’s strong fourth-quarter report. The stock is also getting a boost from the latest round of inflation data.

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Arista surges on strong Q4 print

Arista Networks published its fourth-quarter results after the market closed yesterday and reported sales and earnings that came in above Wall Street’s forecasts. The business posted non-GAAP (adjusted) earnings per share of $0.82 on revenue of $2.49 billion, beating the average analyst estimate’s calls for per-share earnings of $0.76 and sales of $2.39 billion. Arista has continued to benefit from artificial intelligence (AI) infrastructure buildouts, and the company issued encouraging forward guidance in conjunction with its Q4 report.

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NYSE: ANET

Arista Networks

Today’s Change

(3.02%) $4.08

Current Price

$139.20

Key Data Points

Market Cap

$170B

Day’s Range

$139.04 - $148.80

52wk Range

$59.43 - $164.94

Volume

861K

Avg Vol

7.9M

Gross Margin

64.34%

For the current quarter, Arista is targeting revenue of roughly $2.6 billion – topping Wall Street’s previous forecast for sales of $2.46 billion. Management also guided for an adjusted gross margin between 62% and 63% and an adjusted operating margin of roughly 46%.

Today’s inflation report is also lifting Arista stock

The Bureau of Labor Statistics published consumer-price-index (CPI) data for January this morning, and the numbers looked good for Arista and other growth stocks. January CPI inflation came in at 2.4% – below the 2.5% level forecasted by economists. Lower inflation increases the likelihood that the Federal Reserve will cut interest rates, which would likely be a bullish development for the stock market and growth stocks in particular.