What happened

Shares of Arista Networks (NYSE:ANET) gained 11.2% in March 2017, according to data from S&P Global Market Intelligence.

So what

The specialist in software-based cloud computing networks held a successful analyst day in early March. Throughout the rest of the month, at least 10 Wall Street firms rolled out upgrades and/or raised target prices for Arista shares, all based on what the analysts had learned at that moment of close contact with Arista's executives. Share prices simply followed suit with that avalanche of analyst upgrades.

Cloud computing, conceptualized.

Image source: Getty Images.

Now what

Based on the Arista event, analysts largely agree that the company seems poised to grow market share while the cloud computing networking market moves into a new generation of technology with faster speeds and higher margins. In particular, the recently introduced cEOS operating system is seen as a major growth driver, as it embraces the red-hot concept of software containers in a big way.

Arista shares have been handed generous price-to-earnings ratios, but the company backed them up with 33% year-over-year earnings growth and solidly positive cash flows. Arista's share prices have doubled over the last 52 weeks, and the company is earning those gains.

Sometimes you get exactly what you pay for.

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