Mizuho says this under-the-radar stock is a 'clear' AI winner By Investing.com

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Analysts at Mizuho said Alphabet's (GOOGL) latest earnings report shows the company is a “clear winner” in the ongoing AI boom.

“The quarterly results were very impressive and, in my view, a positive enough surprise to change the minds of many naysayers, skeptics, and short-sighted observers,” they wrote.

“Combined with lower operating cost growth and managed messaging. If you really manage all the spend and investment towards AI and be conservative in other areas, you're going to see higher rotational growth and higher margins. We get a bullish scenario of expansion,” the analyst added.

But there is another, less popular “clear winner” in the current situation, according to analysts.

Specifically, analysts believe that: Arista Networks (NYSE:) Another favorable move despite recent skepticism after Nvidia (NASDAQ:) downgraded sell-side based on predictions of future market share loss as Nvidia (NASDAQ:) strengthens networking technology combined with GPU-accelerated computing As an AI strategy that is in a good position.

“ANET has two large cloud customers with the largest share in its core data center sector: MSFT and META,” the analyst noted.

“Who do you think talked about increasing capex and extending it to 2025? META and MSFT,” they added.

ANET stock rose 4% after Meta Platforms (NASDAQ:) announced its AI Capital Expenditure (CAPEX) outlook. Analysts believe the stock has further upside potential ahead of earnings on May 7th.

However, it cautioned that ANET should not expect all of this increased capital spending to directly benefit ANET, nor should it expect any significant upward revisions to its guidance.

Generative AI investments in Ethernet networking are seen as a post-2025 event, suggesting momentum will pick up gradually rather than immediately in the coming quarters, analysts explain Did.

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Arista, on the other hand, is primarily viewed in terms of its growth potential in 2025 rather than 2024. Analysts said the recent downgrade to “sell” heightened concerns that the company would not be able to beat consensus expectations for 15% year-on-year growth.

“ANET says AI turnover will be around $700 million next year as the Ethernet standard expands into AI networking equipment,” they noted.

“But that seems conservative to me, and ANET is the clear leader in DC Ethernet in high-speed, low-latency, mission-critical deployments. It is completely unthinkable for me to expand and build on it.”

“To me, $260 worth of ANET feels like a gift to those who have bought and held major AI winner stocks,” the analyst concluded.





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