The stock market fell on Wednesday as investors kept an eye on debt-ceiling vote by Congress.
Overall, S&P 500 and NASDAQ both declined 0.6% to 4,180 and 12,935, respectively.
Tweet of the Day
technology stocks just SURGED against $SPX – the straight up move led me to look more closely…
we just had the BIGGEST 10-day relative move at +7.1% since March 10, 2009. and, no, if you're wondering if stocks peaked on March 10, 2009, they didn't. they bottomed. big time. pic.twitter.com/UcS6GlH2Xp
— David Cox, CMT, CFA (@DavidCoxRJ) May 30, 2023
Chart of the Day
Here is the one-year chart of Arista Networks (ANET) as of May 24, 2023, when the stock was at $141.
Arista Networks makes network switches that help computer servers communicate in datacenters. It provides Gigabit Ethernet to many companies that run high volume servers that require a lot of bandwidth. Gigabit Ethernet switches are the hardware that connects computer and servers in local networks. The faster the Ethernet switch, the faster data is transmitted between the computers and the local networks.
Arista Networks could be ready to become the next big stock market winner in the AI space. During the past month, AI stocks have been on fire, lead by NVIDIA (NVDA) and SuperMicro Computers (SMCI). NVIDIA makes the brains, then SuperMicro and Arista make the gear (such as servers) and software to run NVIDIA’s GPUs.
David Sharek believes ANET stock is being held back by a so-so quarter the company just reported. Profits were just slightly higher than 2QtrsAgo, and ANET only beat the street by 9 cents a share, versus 20 cents 2QtrsAgo.
Cloud titans was Arista’s largest vertical last qtr, followed by enterprise, specialty cloud providers, financials, then service providers. Meta (META) is now contributing 26% of company revenue, with Microsoft (MSFT) at 16%. Management expects AI networking to become meaningful throughout the decade ahead. However, in the earnings call, David Sharek didn’t get the impression that demand was super strong.
ANET is one of the largest positions in the Growth Stock Portfolio and Aggressive Growth Portfolio.
