Nicholas Rossolillo (Arista Networks): Perhaps you've never heard of 400G technology, but there's a good chance you will be the beneficiary of its eventual adoption. The "G" in 400G refers to the speed at which a data center can process packets of information, and the latest standard is four times faster than the 100G tech that has been around the last few years. As ultra-high-definition video streaming, video game streaming, artificial intelligence services, and other related computing needs continue to become more significant, data centers are under pressure to take on bigger and more complex tasks.
That's where Arista Networks comes in. The data center hardware and service provider is still small, but it's growing fast. Later this year the company's first 400G platforms will start shipping to customers, adding another possible growth driver to the mix. It could take some time for the new tech to gain traction, but the world's internet traffic is only increasing, providing a strong tailwind for the company in the years ahead.
In the meantime, older data center technology upgrades are still providing plenty of momentum. For full-year 2018, management said to expect a 40% increase in sales over 2017, which should result in an even bigger increase in the bottom line. The stock's 12-month forward price-to-earnings ratio is currently 23.6. Paying for a quarter century's worth of profit may not be palatable to every investor, but that could be a fair price to pay for a company growing as fast as Arista is.
Data centers and the cloud computing services they support are set to continue growing for years, and Arista is at the forefront of the movement. With momentum pushing sales higher and a new upgrade cycle getting ready to launch, now could be a great time to consider a purchase.
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