S&P 500 It’s been going on for over two years and is in the middle of a market rally that continues to ignore detractors. A solid economic outlook, increased profits for businesses, and great potential Artificial Intelligence (AI) Everything helped to drive market progress. After winning 24% in 2023, the Benchmark Index increased its profit of 23% in 2024. Market history suggests that S&P is likely to continue to rise in 2025.
Over the past 50 years, the S&P 500 has produced a positive return 78% of the time. Furthermore, after a few years with consecutive profits of over 20%, the S&P rose on average by 12%.
The popularity of stock splits has also revived, and investors will help to reconsider companies that have split their shares since the company’s measures have been historic strong operating and financial results, and to raise the stock price. .
Review two companies with impressive track record worth a look.
Image source: Getty Images.
Investors should be the first to see Arista Network(NYSE: Alette). Stocks have grown 66% over the past year and 2,880% over the past decade (as of this writing). This performance encouraged management to implement a 1-4 stock split. This was completed in December. Despite the company’s long track record, the emergence of AI generated several years ago represents an attractive opportunity that has only just begun.
Arista Networks claims fame and was the development of a groundbreaking network switch that connects high-speed servers and other devices on a network with instant, close response times. The company currently boasts a range of products, including switches, routers, and other networking equipment used to speed up data across servers, data centers and networks. Arista recently developed a custom Ethernet system designed to meet the stringent requirements of large-scale language models (LLMS) that form the basis of AI.
in Third QuarterArista generated revenue of $1.8 billion, up 20% year-on-year, and steadily increased by 7%. This increased earnings per share (EPS) by $2.33, or 35%. The results easily surpassed Wall Street expectations. and Previously issued guidance from management. Shareholders are looking forward to similar performances when Arista released its fourth quarter results after the market closed on Tuesday, February 18th.
As bull markets continue to run, investors are more aware of increased valuations. Arista Networks is currently selling for 56x revenue. This makes the stock less attractive to some investors. However, its positive price/revenue to growth (PEG) ratio – a metric suitable for growth stocks – is 0.95 if any number, which is the standard for undervalued inventory, is less than 1.
The company’s Ethernet and data center expertise has become a key player in the AI revolution. In addition to the long history of Arista Networks’ successful execution and its reasonable value, it also clarify why its stocks are shopping.
Another company investor should have a finalist Palo Alto Network(Nasdaq: Pan). Stocks have remained essentially flat over the past year, but have grown by 813% over the past decade (at the time of this writing). The company’s long performance history has led management to declare a 2-to-1 forward stock split that was completed later last year. Cybersecurity companies made strategic business decisions last year and sent fair weather investors to take them to the exit – and there’s the opportunity there.
Most companies have cybersecurity systems that are rounded together from a variety of vendors, leaving a gap that hackers can exploit. The resulting data breaches and unauthorized intrusions can cost these businesses millions of dollars and loss of customer trust. Palo Alto addressed this issue by integrating individual modules into a unified protection platform that integrates with AI. To sweeten the deal even further, Palo Alto offered Brdige a free service with a gap between multiple vendors and customers (and potential customers) who are obligated to have expiration dates for various contracts.
This strategy was a dangerous strategy, but management reports it was early success. According to CEO Nikesh Arora, customers are “signing large transactions” in response to these changes, and may “provide better security outcomes.” Customers have “critical incentives” to utilize the company’s complete suite of products, including security operations, cloud security, and network security.
In the first quarter of 2025 (ends October 31), Palo Alto returned to growth earlier than expected, up 14% year-on-year to $2.1 billion, and EPS rose 77% to $0.99 . Additionally, annual recurring revenue from the company’s next-generation security services increased by 40% to $4.5 billion. This is evidence that changes in management’s strategy are experiencing success.
As stocks sell at 51x revenue, investors who rely on the most commonly used metrics may be put off (at the time of this writing). However, a PEG ratio of 0.15 clearly indicates that Palo Alto Networks is cheaper than it looks.
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Currently, we are issuing “double-down” alerts to three incredible companies, and we may not have a chance like this anytime soon.
Danny Bena I have a position in Arista Networks. Motley Fool has an Arista Networks position and is recommended. Motley Fool recommends Palo Alto Networks. To Motley’s fool Disclosure Policy.
