JMP Securities analyst Erik Suppiger said Cisco (CSCO) noted strength in data center and campus switching in its Q3 earnings report, which suggests to him that demand trends are favorable for Arista Networks (ANET). In the DC business, Cisco noted it grew double digits year-over-year driven by its hyperconverged infrastructure product, which Suppiger sees pointing to favorable demand for Nutanix (NTNX). Additionally, security sales re-accelerated in the quarter to double-digit growth for the first time in over a year, which the analyst reads as a favorable trend for Palo Alto Networks (PANW). On Cisco itself, Suppiger said he sees the stock as fairly valued and he maintains a Market Perform rating on the shares.

KeyBanc lowered the firm's price target on Palo Alto Networks to $355 from $380 on lower peer multiples, while keeping an Overweight rating on the shares. The firm says that at some point, the case for optimism needs to be backed up by some optimistic data, and its 1Q24 VAR Survey did not deliver it. IT budgets are still in hiding at this point, with just 50% of KeyBanc's respondents meeting or exceeding their goal in the Q1, the lowest quarterly reading since the heart of the pandemic, and sentiment from the follow-up calls with some individuals also has down ticked. The firm's Q4 2023 VAR survey was iffy, the outlook in 2024 from its CIO survey in January was also not great, its SMB survey was worse than expected, and now 2024 is off to a difficult start - "let's just call a trend a trend," KeyBanc adds.