Juniper Networks, a maker of computer network gear sold to telecom service providers, large companies and cloud computing firms, is the IBD Stock of the Day. The relative strength line of JNPR stock is hovering near a new high amid volatility in the Nasdaq.
JNPR stock holds an entry point of 36.13. If it hits 34.84 it'll be above a trendline for an early entry. Shares ended the regular session Thursday up 1.4% to 34.65.
A rival of Cisco Systems and Arista Networks, Juniper has made several acquisitions to expand its market opportunity.
Like Cisco and Arista, Juniper has been coping with supply chain constraints. But it's been able to push through price hikes that will give 2022 revenue a boost.
Juniper stock has retreated 3% in 2022 compared with declines of about 12% at both Cisco and Arista Networks.
JNPR Stock: Acquisitions Target Enterprise, Artificial Intelligence
Amid investor worries about technology stock valuations, Juniper stock trades at a price-to-earnings ratio of just 20. With its acquisitions, Juniper has aimed to build artificial intelligence software tools into its networking products.
"The AI infrastructure and the AI capabilities we have built over the last four to five years are tremendous," Juniper Chief Operating Officer Manoj Leelanivas said at a recent Morgan Stanley conference.
He added, "Our AI-driven enterprise business is growing gangbusters, (with) strong order bookings growth." Juniper is just one AI stock to watch.
While telecom service providers have been the biggest customers of JNPR stock, it's been expanding in the enterprise and cloud computing markets. Enterprise customers include large companies, government agencies and educational institutions.
Further, Sunnyvale, Calif.-based Juniper has been on an acquisition spree. In February, the company acquired network access control firm WiteSand as part of its strategy to target the enterprise market.
Earlier acquisitions of Mist and 128 Technology also targeted the enterprise market. Mist's wireless LAN platform uses artificial intelligence tools for automation and management features.
Juniper Stock Gains Ground In Cloud With IBM, Oracle
With the 128 Technology purchase, Juniper targeted a new technology that links a corporation's headquarters with branch offices and remote workers. It's called software-defined wide area networks, or SD-WAN.
With the 2021 purchase of Apstra, meanwhile, Juniper moved into computer network management. Large companies are integrating their on-premise data centers with multi-cloud infrastructure, analysts say.
In the cloud computing market, analysts say Juniper has gained traction with second-tier providers such as IBM and Oracle. The biggest cloud companies are Amazon Web Services, part of Amazon.com, Microsoft and Alphabet's Google.
The Computer Network group ranks No. 68 out of 197 groups IBD tracks. Meanwhile, the Relative Strength Rating of Juniper stock is 92 out of a best possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS rating of 80 or better.
JNPR stock owns an Accumulation/Distribution Rating of B. Further, that rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Expanding From Telecom Market
For its December quarter, Juniper said it earned 56 cents per share, up a penny from a year earlier. Also, revenue climbed 6% to nearly $1.3 billion.
Analysts estimated per-share earnings of 53 cents on revenue of $1.27 billion.
For the March quarter, Juniper says it expects a per-share profit of 31 cents, in line with estimates. The company also predicts revenue of $1.15 billion vs. estimates of $1.13 billion.
"We believe Juniper's exposure and growth coming from what it calls 'cloud majors' (IBM, Oracle) remains underappreciated," Raymond James analyst Simon Leopold said in a recent note to clients.
"Further, we think Juniper is gaining share in the campus (enterprise) environment," Leopold went on to say. "Juniper will improve its software/recurring revenue narrative and fundamentals, which could boost the stock multiple. Investors still associate Juniper with the (telecom) service provider vertical that now accounts for under 40% of sales."
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
GlobalFoundries Stock Surges Amid Heightened Demand For Chips
Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists
Chart Reading For Beginners: Nvidia, Amazon, Pinterest Reveal This Key Investing Skill
Join IBD Live And Learn Top Chart Reading And Trading Techniques From Pros
How To Use The 10-Week Moving Average For Buying And Selling
