Arista Networks (NYSE: $ANET): Positive Outlook Amid AI Growth

Arista Networks Inc. (NYSE: ANET) closed the latest trading session at $68.67, gaining 1.48% on the day. The stock has recently experienced a steep decline from its 52-week high near $134, yet it remains a key player in the edge computing space. As of Q4 2024, 78 hedge funds held positions in Arista, signaling strong institutional interest.

The company’s infrastructure supports edge computing by delivering ultra-fast, programmable switches and routers. These tools are vital for real-time data management in environments such as data centers and IoT systems. With the growing demand for AI-driven workloads at the network edge, Arista’s technology is well-placed to support this shift.

In 2024, Arista recorded $7 billion in revenue, marking a 19.45% increase from the previous year. Its net income rose by 36.3% to $2.85 billion. In Q4 alone, revenue jumped by 25.3% year-over-year to $1.93 billion. To enhance AI workload management, Arista launched the EOS Smart AI Suite with Cluster Load Balancing, a solution aimed at improving system efficiency under large-scale processing demands.

The edge computing market is on track to grow significantly, with global spending expected to reach $261 billion in 2025. This trend is supported by broader interest in Internet of Things (IoT) and AI technologies. Analysts predict this spending will climb to $380 billion by 2028.

Technical Analysis

Arista's price action shows it tested a key support zone at around $60, with the 200-day moving average at $65.95. The stock previously attempted to rebound above resistance at $77 but failed, forming a bearish setup. Current RSI stands at 31.16, suggesting the stock is close to oversold reading.

If it holds above the $60 support, a potential bounce could target $77, followed by $90 and above, aligning with the 100-day moving average. A break below $65 could open a path toward $60 or lower. Volume has been heavy during the downtrend, indicating strong selling pressure.