We recently published a list of Billionaire Steve Cohen’s 10 Large-Cap Stock Picks With Huge Upside Potential. In this article, we are going to take a look at where Arista Network Inc. (NASDAQ:ANET) stands against other billionaire Steve Cohen’s large-cap stock picks with huge upside potential.
What does the future hold for the US economy and equities amid punitive tariffs, immigration crackdown and federal spending cuts? That’s the million-dollar question as the chairman and CEO of hedge fund Point72 Asset Management, Steve Cohen, sounds alarm bells warning the US economy could be on the brink amid macroeconomic uncertainties.
The billionaire investor has fired a warning shots, insisting that President Donald Trump’s aggressive trade policy could cause the economy to grow at a much slower rate of 1.5% in the second half of the year, down from an initial growth forecast of 2.5%. The warning comes on Trump touting tariffs for various purposes, including lowering trade imbalances and gaining more negotiating power over other nations. Nevertheless, their negative impact continues as the service sector, a key economic driver, grows slowly from 2023.
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“Tariffs cannot be positive, okay? I mean, it’s a tax,” Cohen said Friday at the FII Priority Summit in Miami Beach, Florida. “On top of that, we have slowing immigration, which means the labor force will not grow as rapidly as … the last five years and so.”
Cohen has warned that the good times that saw the equity market trickle to record highs are over as the US economy’s outlook is uncertain due to the tariff plan laid out by Trump. True to Cohen’s warnings, the US stock market has pulled back significantly from record highs. Given the uncertain macro environment, the S&P 500 is already down by about 8% for the year and on the cusp of entering the correcting phase.
Echoing similar sentiments is Morgan Stanley CIO Mike Wilson, who insists a significant correction has been on the cards since 2023. According to Wilson, investors had pushed stocks upwards, with valuation skyrocketing above historical norms and beyond the value of their fundamentals. Therefore, a rapid descent should be expected as headwinds soar left, right and centre.
“I’m actually pretty negative for the first time in a while,” Cohen said. “It may only last a year or so, but it’s definitely a period where I think the best gains have been had and wouldn’t surprise me to see a significant correction.”
On the other hand, Cohen remains optimistic about the artificial intelligence outlook despite DeepSeek’s revelation and development on the development of cost-effective AI models rattling the US markets. According to Cohen, DeepSeek’s development of cost-effective AI models is positive despite raising concerns about spending on powerful AI chips developed by US companies.
Cohen is one of the billionaire investors taking advantage of the artificial intelligence boom through strategic investments. His portfolio at Point72 Asset Management hedge boasts significant exposure to tech giants developing and leveraging various AI innovations. Likewise, Point72 Asset Management has already unveiled a new artificial intelligence-focused fund that posted a 14% gain in the last three months of 2024 growing to $1.5 billion.
Our Methodology
We combed Point 72 SEC Q4 2024 13F filings to identify billionaire Steve Cohen’s 10 large-cap stock picks with huge upside potential. We focused on stocks with a market cap of more than $40 billion with significant upside potential. We then analyzed the stocks on why they stand out as solid investments well poised to generate significant value even on the overall equity market turning bearish. Finally, we listed the stocks in ascending order of upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician in a server room managing a large-scale network of computers.
Arista Network Inc. (NASDAQ:ANET)
Market Cap as of April 24: $88.85 Billion
Point72 Asset Management’s Equity Stake: $333.92 Million
Analysts’ Upside Potential as of April 24: 50.40%
Number of Hedge Fund holders: 78
Arista Network Inc. (NASDAQ:ANET) is a computer hardware company that develops markets and sells data-driven, client-to-cloud networking solutions for AI, data centers, campus, and routing environments. It has emerged as a market leader in the provision of connectivity solutions, such as ethernet switches for artificial intelligence.
Consequently, Arista Network Inc. (NASDAQ:ANET) is one of the companies susceptible to Donald Trump’s tariffs, a disadvantage that has taken a significant toll on the stock’s sentiments. The stock is down by about 33% for the year, an underperformance that has seen Evercore ISI cut its price target of the stock to $100 from $130 while reiterating an Outperform rating. The sell rating comes amid growing concerns that Arista Network will feel the full brunt of trade tariffs expected to impact its gross margins.
Amid the growing concerns, Arista Network Inc. (NASDAQ:ANET) boasts of a healthy revenue growth rate of 19.5%. Evercore ISI also expects the company to meet its $750 million back-end AI revenue target and achieve growth targets of as much as 20% in 2025. As US-based hyperscalers double down on artificial intelligence spending, Arista Networks should be one of the biggest beneficiaries.
Overall, ANET ranks 2nd on our list of billionaire Steve Cohen’s large-cap stock picks with huge upside potential. While we acknowledge the potential of ANET as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ANET but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.