3 Edge Computing Stocks Accelerating the Data Revolution
With edge computing, all of the data collecting and processing are carried out by computers located close to where the user is based rather than data centers located far from the user. Edge computing enables processes to be carried out much more quickly than when data centers are involved. Additionally, computers can provide more services when they utilize edge computing. This has led to those list of edge computing stocks to buy.
For example, self-driving cars cannot function efficiently without edge computing, while the best “voice assistants” also use the latter technology. Finally, Edge AI, which involves AI powered by edge computing, can control all sorts of machines to optimize their performance and make them much more efficient.
Given all these points, it’s clear that the demand for edge computing products will grow a great deal in the medium term and the long term. Here are three edge computing stocks to buy for investors who want to exploit the latter trend.
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Arista Networks (ANET)
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Arista Networks (NYSE:ANET), which once focused solely on providing hardware used by the cloud giants, has developed a sizeable, new business that involves providing network equipment used in small, on-site data centers. The latter business is reportedly expanding quickly. Moreover, ANET provides “infrastructure software for managing local networks enabled by edge computing.”
ANET reported very strong third-quarter results on Oct. 30, as its revenue soared 29% versus the same period a year earlier to $1.5 billion, while its net income jumped to $545 million last quarter from $354 million in Q3 of 2022. The firm expects its top line to leap 33% this year.
“Customer momentum remained strong in both enterprise and cloud/AI sectors,” CEO Jayshree Ullal said in a statement.
Nutanix (NTNX)
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Nutanix (NASDAQ:NTNX) also provides hardware in cloud and edge computing. For edge computing users, its “hyper-converged technology ensures that customers get the same performance and agility benefits that users receive in the cloud,” Seeking Alpha columnist Gary Alexander reported last month.
Also noteworthy is that the company’s product is efficient because it offers “storage, computing, and networking” capabilities. Moreover, the prominent tech research firm, Gartner, has identified the company as the top provider of such integrated systems. At the same time, the reviewers on Gartner’s website awarded it an average of 4.7 stars. That left Nutanix tied for the top spot. One reviewer wrote that “Nutanix Cloud Infrastructure (NCI) provides everything needed for moving to a hybrid cloud model of managing our site: an excellent, reliable platform, security, and full virtualization ability.”
On Sept. 21, Bank of America upgraded NTNX stock to “buy” from “neutral” and hiked its price target on the shares to $50 from $39. The bank is upbeat on the company’s new “AI-ready infrastructure” and its partnership with Cisco (NASDAQ:CSCO).
Hewlett Packard Enterprise (HPE)
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Hewlett Packard Enterprise (NYSE:HPE) provides networks used to facilitate edge computing, such as the Aruba EdgeConnect SD-WAN. The product allows companies to access data from both the edge and the cloud.
HPE adds that “HPE’s connected edge expertise, data management tools, and proven integration capabilities can help you (grow) across all your edge locations.”
The company’s cloud-based GreenLake services enable firms to simultaneously manage, analyze, and automate their edge computing and cloud-based data. It also provides IT security services. HPE Greenlake earned an average of 4.8 stars from eight users on Gartner’s website.
HPE has an extremely low forward price-earnings ratio of eight and a dividend yield of 3%.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
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