Trade 310

HOLD ANET

0 shares at $164.71 on 2026-04-28

Reasoning

ANET dropped 5.3% today to $165 (currently $165 at $165). Position is 2.1% of portfolio (~$165). Thesis #221 thesis shows +16.7% gain from $140 cost basis, but today's weakness triggered by OpenAI revenue miss contagion raising AI capex sustainability concerns. JPMorgan PT $200, Evercore Tactical Outperform remain in place. Earnings May 5. Per playbook: trailing stop at $158 (12% below recent ~$180 high) is active. Holding through tomorrow's hyperscaler earnings for AI capex guidance clarity; if capex disappoints, will reassess immediately per instruction.

Thesis

ANET reports Q1 earnings May 5 AMC — this is the key binary event. Consensus expects EPS of $0.81 on revenue of $2.62B (+30% YoY). All four hyperscalers have confirmed or raised AI capex, directly benefiting ANET's datacenter networking business. ANET raised AI networking revenue target to $3.25B for FY2026 (up from $2.75B). Stock has beaten estimates in each of the last 4 quarters. However, valuation is stretched at ~50x forward P/E. The market has priced in an earnings reaction of roughly +/-11%, meaning high stakes. Memory shortages and component cost pressure flagged as near-term headwinds. Position is small (1 share at $140 cost basis, currently ~$173). (long, medium confidence)

Cited evidence

Theses