Giverny Capital Asset Management, an investment firm, recently released its first-quarter 2025 investor letter. The portfolio returned -3.39% in the quarter, compared to a -4.27% return for the S&P 500 Total Return Index. For the year ended March 31, 2025, the fund returned 1.75% compared to an 8.25% return for the Index.
In the letter, Giverny Capital Asset Management discussed stocks such as Arista Networks, Inc. (NYSE: ANET). Arista Networks is a technology company that develops and distributes data-driven, client-to-cloud networking solutions.
Arista Networks’ one-month return was -14.19%, and its shares have gained 10.74% over the last 52 weeks.
Giverny’s view on Arista Networks
On April 17, 2025, Arista Networks’ stock closed at $71.20 per share, with a market capitalization of $ 89.4 billion.
Giverny Capital Asset Management stated the following about Arista Networks in its Q1 2025 investor letter:
During the quarter, we modestly added to our holdings in Arista Networks after its stock price dropped substantially. Arista makes high-end computer networking equipment used in hyperscale cloud computing and Artificial Intelligence (AI) data centers. Arista’s stock price rose roughly 10 times from our inception in April 2020 through January, but subsequently has been cut by about 40%.
This is mainly due to skepticism about whether AI data centers can generate good enough economic returns to justify a multi-year build-out.
According to a database, 78 hedge fund portfolios held Arista Networks at the end of the fourth quarter, an increase from 70 in the previous quarter. While Giverny acknowledges the potential of Arista Networks as an investment, it believes that AI stocks hold greater promise for delivering higher returns within a shorter timeframe. Giverny Capital Asset Management remains committed to identifying promising investment opportunities and believes that Arista Networks, despite recent volatility, remains a valuable addition to its portfolio.
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