The networking industry has grown significantly over the past year with businesses’ increased dependence on cloud computing and other technology platforms that require networking. The growing adoption of 5G and the use of other advanced technologies worldwide should keep driving the demand for the networking solutions. So, two established players in the space—Ericsson (BS:ERICAs) (ERIC) and Arista (ANET)—are expected to benefit significantly in the coming months. But which of these two stocks is a better buy now? Let’s find out.Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) and Arista Networks , Inc. (NYSE:ANET) are two of the established players in the networking industry. Headquartered in Stockholm, Sweden, ERIC provides infrastructure, services, and software to the telecommunication industry, among other sectors. ERIC operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. ANET develops, markets, and sells cloud networking solutions that include its extensible operating system (EOS) and routing platforms, among others.
The ongoing transition from 4G networking to 5G and other technological advancements have been brightening the networking industry’s prospects. The industry has been benefiting already from increased dependence on cloud computing. With several industries looking to integrate their supply chains and other domains into one platform for better coordination, the networking industry is expected to grow significantly in the coming months. According to Global Market Insights, the data center networking industry is expected to grow at an approximate 15% CAGR between 2021 - 2027. So, both ANET and ERIC should benefit.
But while ANET has gained 52.2% over the past year, ERIC has returned 49.7%. In terms of past six months’ performance, ANET is a clear winner with 25.1% returns versus ERIC’s 7.6%. But which of these two stocks is a better pick now? Let's find out.