Jim Cramer’s Latest Game Plan: 15 Stocks to Watch

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

Number of Hedge Fund Holders: 65

Calling Arista Networks, Inc. (NYSE:ANET) stock a buy, Cramer remarked:

“The best networking story to own out here is Arista. That’s right. It’s a hyperscaler helper and it makes network switching equipment that’s ubiquitous in the data center. It reports after the close Thursday and it is a buy.”

Arista (NYSE:ANET) provides networking solutions for data centers, campuses, and routing, including AI-driven switches and software for automation, monitoring, and security. It offers post-sales support and serves industries like internet, finance, and telecommunications through various sales channels. Network switching equipment is hardware used to manage and direct data traffic within a computer network.

According to the company, it serves over 10,000 customers globally, with a total of 100 million ports deployed worldwide. In June, the company introduced a new product called the Etherlink AI platform. This platform is designed to be fully compatible with a specific standard for Ethernet, which is a type of network connection. Essentially, it helps different types of network equipment work together more easily.

During its Q2 earnings call, Arista (NYSE:ANET) management highlighted that the company is positioned as a pure-play networking innovator, with a total addressable market (TAM) exceeding $70 billion. The company also emphasized that 2024 is expected to be a year marked by the introduction of new products, the acquisition of new customers, and expanded use cases for its solutions.

For 2024, it set its revenue growth guidance for 2024 at a minimum of 14%. Additionally, the company’s gross margin outlook is forecasted to remain between 62% and 64%, while its operating margin projection has been raised to approximately 44%.