UBS’ Top Quant Stocks In AI, IT, Healthcare & Other Sectors: Top 33 Stocks In All Sectors

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

Number of Hedge Fund Investors In Q2 2024: 65

Sector: Information Technology

Arista Networks, Inc. (NYSE:ANET) is a technology company that focuses on cloud computing hardware and software. The firm makes and sells Ethernet products, and it also provides key networking software that is used in large-scale computing systems. These provide Arista Networks, Inc. (NYSE:ANET) with exposure to the artificial intelligence industry particularly since intra-data center connectivity depends to a large extent on its products. At the same time, it also opens Arista Networks, Inc. (NYSE:ANET) up to competition from NVIDIA which sells InfiniBand products as Ethernet competitors. However, the firm benefits from being a pure-play connectivity hardware and software provider. This enables it to deeply develop key capabilities, with the software business also offering margin-heavy recurring revenue. An example of how Arista Networks, Inc. (NYSE:ANET) has benefited from this is through its deal with Facebook parent Meta to help develop a 100,000 AI GPU cluster.

Madison Funds mentioned Arista Networks, Inc. (NYSE:ANET) in its Q2 2024 investor letter. Here is what the fund said:

“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.”