Arista Networks (ANET 1.61%) stock is making big gains in Friday's trading. The networking-technology company's share price was up 5.4% as of 3 p.m. and had been up by as much as 10.1% earlier in trading.
Arista Networks' valuation is moving higher thanks to the company's strong fourth-quarter report. The stock is also getting a boost from the latest round of inflation data.
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Arista surges on strong Q4 print
Arista Networks published its fourth-quarter results after the market closed yesterday and reported sales and earnings that came in above Wall Street's forecasts. The business posted non-GAAP (adjusted) earnings per share of $0.82 on revenue of $2.49 billion, beating the average analyst estimate's calls for per-share earnings of $0.76 and sales of $2.39 billion. Arista has continued to benefit from artificial intelligence (AI) infrastructure buildouts, and the company issued encouraging forward guidance in conjunction with its Q4 report.
NYSE: ANET
Key Data Points
For the current quarter, Arista is targeting revenue of roughly $2.6 billion -- topping Wall Street's previous forecast for sales of $2.46 billion. Management also guided for an adjusted gross margin between 62% and 63% and an adjusted operating margin of roughly 46%.
Today's inflation report is also lifting Arista stock
The Bureau of Labor Statistics published consumer-price-index (CPI) data for January this morning, and the numbers looked good for Arista and other growth stocks. January CPI inflation came in at 2.4% -- below the 2.5% level forecasted by economists. Lower inflation increases the likelihood that the Federal Reserve will cut interest rates, which would likely be a bullish development for the stock market and growth stocks in particular.
