The stock market rose on Thursday as investors were relieved that the Federal Reserve would just delay its rate cuts this year. On Wednesday, the central bank reiterated that there would be three interest rate cuts this year as it kept borrowing costs unchanged.
Overall, S&P 500 was up 0.3% to 5,242, while NASDAQ rose 0.2% to 16,402.
Tweet of the Day
On this day in 2008 Visa $V went public at $44 per share
Nancy Pelosi purchased 5,000 shares two days prior after working on the framework of the credit card industry as speaker of the house
Here she is getting questioned on her purchase of Visa stock: pic.twitter.com/qUJKMlex68
— Ticker History 🗞 (@TickerHistory) March 20, 2024
Chart of the Day
Here is the ten-year chart of Arista Networks (ANET) as of March 5, 2024, when the stock was at $280.
Arista Networks continues to be one of the stock market’s best stocks as the thirst for AI products continues to drive demand. Although the company manufactures AI networking equipment, it also makes equipment that is used to improve company infrastructure. Profits grew by 48% last quarter and whipped analysts’ estimates of 26%.
During the past 12 quarters, ANET’s quarterly profits (in Earnings Per Share or EPS) have grown every quarter from $0.63 to $2.08. One thing that was not impressive last quarter was revenue growth, which slumped to 21% from 28% two quarters ago. Analysts estimate revenue will rise just 14% next quarter, so slowing growth a situation to monitor. Also, the P/E of 37 is the highest since our January 2022 report when it was at 42. Slower revenue growth and a higher P/E might take the wind out of this stock’s sails.
ANET is one of our largest positions in the Growth Stock Portfolio and Aggressive Growth Portfolio. This stock is a true market leader at this time, but has just 7% upside to our 2024 Fair Value of $280.
