Tuesday's IBD 50 Stocks To Watch pick, artificial intelligence leader Arista Networks, is in a new buy area amid a rebound from a key support level. That makes Arista Networks one of the best AI stocks to watch right now. Shares rallied more than 2% midday Tuesday.
Arista sells computer network switches that speed up communications in internet data centers.
Arista's biggest customers are Microsoft and Facebook-parent Meta Platforms. Newer customers include Oracle and Google-parent Alphabet.
On Feb. 12, Arista earnings jumped 48% to $2.08 per share. Revenue climbed 21% vs. the year-ago period, to $1.54 billion.
By 2025, some analysts expect Arista to get a boost from customer investments in artificial intelligence infrastructure. Internet data centers will need more computing power and network bandwidth to process AI workloads.
"With component lead times easing and visibility normalizing and becoming more limited, growth/backlog is now declining," said Oppenheimer analyst Kidron Singh in a report. "While this is a near-term concern for investors, we expect Arista to continue gaining switching share, benefit from AI, and make meaningful inroads into (enterprise) campus and WAN, offsetting headwinds."
AI Stock Rebounds
Following solid losses in recent sessions, the AI stock is rebounding from its 50-day line, according to IBD MarketSurge chart analysis. A decisive bounce would place the AI stock in a new buy area, offering investors a chance to pick up shares.
Following big price gains over the last couple years, the AI stock boasts a near-perfect 98 IBD Composite Rating, according to IBD Stock Checkup. That makes Arista one of the best AI stocks to watch.
On another bullish note, the stock's relative strength line hit new highs in early March before the stock's latest test of the 50-day line. That's a sign of strong stock market outperformance. Remember, the RS line measures a stock's price performance vs. the S&P 500 and is the blue line plotted on IBD Charts.
Best Stocks To Buy And Watch
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Celsius | 68.94 | Consolidation | |
| Netflix | 579.64 | Tight area | |
| Cloudflare | 102.30 | Tight area |
Source: IBD Data As Of March 5, 2024
Follow Scott Lehtonen on X, formerly known as Twitter, at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
