11 Best Computer Hardware Stocks to Invest in Right Now

2. Arista Networks, Inc. (NYSE:ANET)

Number of Hedge Fund Holders: 70

Arista Networks, Inc. (NYSE:ANET) specializes in providing advanced networking technologies primarily for large data centers and cloud environments. It develops high-speed networking products that facilitate efficient data transfer and communication within data centers and across cloud services. For instance, their Ethernet switches are essential for connecting various devices and managing data flow. Its product offering is categorized into three main segments, including Core Products, Cognitive Adjacencies, and Network Software and Services.

Management has prioritized developing AI-driven networking solutions while enhancing its Core Products portfolio. Currently, Core Products account for 60% to 65% of the total revenue mix, with the Americas being the largest market contributing more than 81% to its sales. During the third quarter results for fiscal 2024, Arista Networks, Inc. (NYSE:ANET) announced significant corporate and government partnerships. For instance, the company in collaboration with Meta is innovating its Etherlink portfolio to meet the demand for AI-centric networking. It introduced new products including Ethalink 7700, and enhanced its 800-gigabit Ethernet offerings.

Moreover, on the government side Alabama Fiber Network, a consortium of eight electric cooperatives selected Arista Networks, Inc. (NYSE:ANET) as its provider of routing and switching equipment for its robust middle-mile network project. This initiative delivers affordable, high-capacity, and reliable internet access to last-mile providers and large enterprises throughout underserved rural areas across Alabama.

Demand for its networking technologies and software remains robust as during the third quarter the company grew its revenue by 20% year-over-year to $1.81 billion. In addition, its GAAP gross margins remained robust at 64.2%, compared to 62.4% from the prior year. It is one of the best computer hardware stocks to invest in right now.

Madison Mid Cap Fund stated the following regarding Arista Networks, Inc. (NYSE:ANET) in its Q2 2024 investor letter:

“We trimmed our positions in Arista Networks, Inc. (NYSE:ANET) and Carlisle Companies. Both of these companies have witnessed strong multi-year growth in their stock prices, which have resulted in elevated valuations. While we remain confident in the long-term prospects of both of these businesses, we trimmed our holdings to more appropriate position sizes given the risk/reward offered.”