As expected, ANET produced a stellar quarter with strong growth in both top and bottom lines. They have good visibility and expect the momentum to carry on into Q4.

“The Titans, starting with Microsoft and Meta are continuing with their 400-gig journey. They’re using our latest fixed and debugger modular 400-gig switches in these new deployments. We are continuing to expand our use cases with the other titans too.“

From the conference call, the group has continued to gain market share. With International revenue contributing 17%, it does look like they have a huge addressable market to grow into. Having said that, they are still dependent on the cloud titans especially MSFT and META which each accounts for 10% of their revenue. If any of them change tack like a few years ago, ANET will feel the impact directly. Business is volatile in nature so expect uneven demand from year to year but stepping back and looking at their performance over a 3 to 5 years period, they are definitely a growing business.

At the time of writing, ANET occupies 5.1% of my portfolio and I will continue to hold on to my current stake.

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