Picking Up More Shares of This AI Play After We Locked in Some Gains
| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
| ANET | Buy | 170 | $142.75 | 1,410 | 3.4% |
After you receive this alert, the Pro Portfolio will buy 170 shares of Arista Networks ($ANET) at or near $142.75. Following the trade, the Portfolio will own 1,410 ANET shares, roughly 3.4% of its assets.
We are using the recent drawdown in the shares of Arista Networks and the bullish outlooks for the AI and data center markets to pick up more shares. This will help rebuild the Portfolio’s position after we locked in a gain in ANET shares in mid-April near $164.
Those outlooks include the following:
Cisco ($CSCO) raised its AI order expectation to $9 billion for this year from its prior guidance of $5 billion.
During the company’s quarterly earnings call last night, Cisco management shared the company’s total product orders grew 35% year over year. Product orders from service provider and cloud customers accelerated in the quarter, growing 105% year-over-year with five of the top hyperscalers each growing in triple digits. Excluding hyperscaler orders, product orders were up 19% year over year.
Networking product orders at Cisco continued to accelerate, growing more than 50% in the quarter. The driving factor was “triple-digit growth in service provider routing and compute and double-digit growth in data center switching, campus switching, wireless, enterprise routing and industrial IoT products.”
More importantly as it relates to not only Arista but also networking chip demand for Marvell ($MRVL), Broadcom ($AVGO) and Nvidia ($NVDA), this was the seventh consecutive quarter of double-digit growth for Cisco. We continue to see rising AI adoption and usage increasing networking capacity utilization levels, leading to higher capex levels. We will continue to track AI adoption levels, but as we’ve discussed previously, AI usage levels will be the real data to follow.
Also, on Thursday morning, Taiwan Semiconductor ($TSM) upped its outlook for the global semiconductor market to $1.5 trillion. Previously, it saw the market hitting $1 trillion in 2030.
What’s driving that increase (no surprise): AI and data center demand. AI and high-performance computing are expected to account for 55% of the $1.5 trillion market, followed by smartphones with 20%, and automotive applications with 10% per its revised outlook. Consulting firm McKinsey forecasts data center spending will tally about $7 trillion by 2030 as the number of data centers across the globe. In late 2025 estimates put the number of data centers near 5,425 and that figure is expected to reach between 10,000 to 12,000 by 2030.
That’s the opportunity we are capturing with the shares of ANET as well as our chip positions.
When today’s ANET trade is complete, we will reset our checkpoint at $125.
More Pro Portfolio
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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade’s executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long ANET, AVGO, MRVL, and NVDA
