Tech Today: Arista Storms Cisco's Turf, Impinj Soars, Snap's New Blood

Here are some things going on today in the world of tech :

Arista, campus star


Shares of Arista Networks (ANET) are up $6.01, or 2.4%, at $258.37, after the company yesterday afternoon held its annual analyst day  meeting at its headquarters in in San Jose, Calif. It unveiled  its first products to challenge Cisco Systems (CSCO) in the latter's dominant franchise in so-called campusnetworking, the fundamental equipment used to build local-area networks inside corporate offices.

Most of the reviews today are raves, with analysts enthusiastic about the $3 billion to $4 billion new market opportunity the company outlined. Arista told analysts at the meeting not to expect "material" revenue from the initiative until 2020.

Among fans this morning, Morgan Stanley's James Faucette  reiterates an Overweight rating on the stock and a $310 price target, wiring, "For us, ANET's attraction as a stock is the push into new markets, including campus, that the company is just beginning."

Rod Hall  of Goldman Sachs  focuses on the financial targets introduced at the meeting, writing that the company's stated operating profit margin target range of 32% to 34%, up from a range of 23% to 27% that had last been offered in 2014, is "more realistic" in his view, and he sees potential "upside."

One doubter is JPMorgan's Samik Chatterjee, who maintains a Neutral rating on the stock, arguing that "delivering share gains in the campus market might be tougher relative to Arista's success in the data center."

Among the challenging factors, Chatterjee cites the prospect that small and medium businesses may not be interested in "changing their network architecture substantially" and also that Cisco has had "success with its subscription-based revenue models in Catalyst 9K switches."

Impinj soars

Shares of wireless tag technology maker Impinj (PI) are soaring, up $4.35, or 32%, at $17.93, after the company yesterday afternoon reportedQ1  revenue that topped analysts' expectations and forecast this quarter's revenue higher, after three disappointing quarters in a row.

The last disappointment was in February, when the company said it would stop issuing annual forecasts.

The good news, as described this morning by Piper Jaffray  analyst Troy Jensen, is that the buildup in inventory that hung over the last few quarters is dissipating.

"Management said it believes the March quarter marks the low point for endpoint IC sales volumes and expects 15-20% growth in 2018 end-user consumption," writes Jensen, reiterating his Overweight rating on the shares and his $19 price target.

The stock is still down 19% this year and 30% in the past 12 months.

Zebra surges on earnings beat

Among other results in earnings, Zebra Technologies  (ZBRA), maker of wireless tracking systems that, in fact, use some of Impinj's technology, are surging, up $14.45, or 11%, at $151.93, after the company this morning reportedQ1  revenue and profit that easily surpassed expectations, at $977 million in revenue and $2.56, versus consensus for $936 million and $2.05 per share.

The outlook is also much higher, at $977 million to $984.5 milling for this quarter and profit of $2.10 to $2.30, ahead of consensus for $954 million and $2.11 per share.

The company raised its outlook for this year, to 6% to 9% growth from a prior range of 4% to 7% offered back in January. At $3.95 billion to $4.06 billion, that projection tops consensus for $3.94 billion.

I'll have more with Zebra management later today.

Snap's new blood


Shares of beleaguered "camera" company Snap (SNAP) are up 29 cents, or 2.7%, at $11.03, after the company late yesterday said in a filing  with the Securities & Exchange Commission that its chief financial offer, Andrew Vollero, "agreed that he will depart Snap," leaving after May 15.

Snap said it hired Tim Stone, the VP of finance at  (AMZN), as its new CFO. Stone ran investor relations at Amazon.

In response this morning, Aegis Capital's Victor Anthony  reiterates his Hold rating on Snap, calling him a "great hire" and arguing that Stone will "bring a fresh perspective that should hopefully stabilize operations at Snap."

ServiceNow's forecast disappoints

Another company that held an analyst day yesterday is ServiceNow  (NOW), the cloud-computing specialist that serves as a kind of outsourced IT service desk for companies.

The stock is down $2.31, or 1.3%, at $173.71, in response.

Analysts this morning are writing that the immediate focus is the company's discussion of profit margin, which could be rather disappointing for some investors, with ServiceNow indicating margin expansion won't be as much as some have hoped for.

Shebly Seyrafi of FBN Securities  reiterates an Outperform rating and a $185 price target, writing that the forecast "implies at least a 22% operating margin in F2020," which is "likely below the prior goal of 28-30% by F2020."

He urges investors not to be too disappointed: "However, we would be buyers on any such stock weakness as we believe that the company is being conservative and model 24.6% NG operating margin (and see upside) in F2020."

Qualcomm gives up on server chips

Chip giant Qualcomm's (QCOM) bid to challenge Intel  (INTC) in its dominant server-chip business appears to be fading, according to a report yesterday  by Ian King of  Bloomberg, citing a single unnamed source.

"The San Diego-based company is exploring whether to shutter the unit or look for a new owner for the division," writes King. The move is part of Qualcomm's effort to cut costs in "non-core" efforts, indicates King.

Qualcomm first announced  the server push back at its analyst day in November of 2014.

Qualcomm shares today are down 78 cents, or 1.5%, at $52.23.

Toshiba's chip deal imperiled by U.S.-China trade tiff

Remember last September, when Toshiba (6202.Japan) reached a deal  with a consortium of private-equity and tech companies to sell off the part of its business that makes NAND flash  memory chips?

The Wall Street Journal's  Takashi Mochizuki  and  Kosaku Nariokatoday report  that the actual sale is looking increasingly unlikely of getting approval from China's regulators.

Toshiba "has mostly given up" on the deal, write the reporters, citing multiple unnamed sources, as "Chinese authorities have been generally uncommunicative about the status of Toshiba's application." The article implies things have been complicated by the U.S.-China trade battle, likening this impasse to the recent disruption of Qualcomm's (QCOM) ongoing bid to buy NXP Semiconductors (NXPI).

A source tells the reporters that the "current scheme is dead" and that Toshiba is moving on to look at "next steps."

Earnings fiesta continues

On tap for earnings this afternoon, after the closing bell, are fiber-optic component vendors Neophotonics (NPTN), Oclaro  (OCLR), and Applied Optoelectronics (AAOI), online goods marketplace Etsy  (ETSY), cloud-computing company Twilio  (TWLO), artificial intelligence pioneers Veritone (VERI), security tech firm Rapid7  (RPD), Hadoop  distributor Hortonworks (HDP), and solar-energy pioneer SunPower (SPWR).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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