Redburn Atlantic Backs Arista Networks (ANET) and Broadcom as Top AI Data Center Plays

We recently published a list of 12 AI Stocks on Latest News and Ratings. In this article, we are going to take a look at where Arista Networks Inc (NYSE:ANET) stands against other AI stocks on latest news and ratings.

On May 28, Redburn Atlantic Equities analyst Mike Harrison initiated Arista Networks Inc (NYSE:ANET) as “Buy” with a price target of $112.00. Arista Networks Inc (NYSE:ANET) develops, markets, and sells cloud networking solutions. Initiating Broadcom with a buy as well, the firm said both stocks are “our preferred” artificial intelligence data center plays.

“We initiate coverage with Buys on Broadcom and Arista.”

The analyst told investors in a research note how Arista’s networking products are “significant beneficiaries” of both larger generative artificial intelligence cluster sizes and the transition toward Ethernet for back-end networks. The firm further said that the competitive advantage lies in the Extensible Operating System, its network operating system.

A technician in a server room managing a large-scale network of computers.

The EOS is hailed for its advanced load-balancing capabilities and real-time telemetry that in turn, leads to heightened network efficiency. It has also helped drive impressive financial results for Arista.

“However, since this implies that Arista is exposed to both internal and external workloads at hyperscalers, there is plausibly greater exposure to near-term cyclical headwinds within Arista’s GenAI revenue streams than Broadcom’s.” the analyst warns.

Besides the EOS, the firm also pointed out Arista’s Cognitive Adjacencies division, which is a division known for its capacity to meet AI-driven demand across both public and private cloud environments. All in all, the firm believes that Arista Networks is well-equipped to steer through the evolving technological landscape, especially artificial intelligence.

Overall, ANET ranks 6th on our list of AI stocks on latest news and ratings. While we acknowledge the potential of ANET as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ANET and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.