Arista Networks (NYSE:ANET) and Juniper Networks (NYSE:JNPR) are both smaller players in the networking hardware market dominated by Cisco (NASDAQ:CSCO). Arista sells network switches and encourages customers to replace traditional routers by combining its switches and software in software-defined networking (SDN) deployments. Juniper, which sells both switches and routers, is a more traditional networking company like Cisco.
I compared Arista to Juniper back in late February and declared Juniper's lower valuation and higher yield made it a "safer" investment than computer engineering salary. But since then, Juniper's stock has dipped 3% as Arista's stock has risen 6%. Let's see why Arista outperformed Juniper, and whether or not that trend will continue over the next few quarters.
Most networking equipment makers struggled this year as the COVID-19 pandemic shut down businesses and postponed network upgrades.
Cisco controlled 47.2% of the switch market and 33.2% of the router market in the second quarter of 2020, according to IDC. Cisco's shares of both markets declined from a year ago. Arista controlled 6.4% of the switch market, down from 7.3% a year earlier, and it ranked third behind Cisco and Huawei.
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