Arista Comments On Tomahawk Bode Well For Broadcom

JPMorgan’s Harlan Sur maintained an Overweight rating for Broadcom Corporation BRCM, while saying that the datacenter switch and packet/fabric processor silicon market is expected to generate a double-digit CAGR.

Analyst Harlan Sur believes that Broadcom is uniquely positioned as a merchant silicon leader in the segment. He expects Broadcom’s growth in 2016 to be driven by the company’s two product cycles in datacenter switching and routing - Tomahawk and Jericho chipsets.

Strong 4Q15 earnings by Arista Networks Inc ANET, a major customer of Broadcom, may allay investor concerns about the ramp-up of these two technologies.

Sur pointed out that the Tomahawk chipset is ramping into several platforms at Arista and other OEMs/ODMs and is likely to witness strong adoption in 1H16. The adoption of Broadcom’s Jericho chipsets is expected to be healthy in aggregation switches and edge routers in the second half of 2016.

Arista management announced that the Tomahawk-based switching platforms had already gained traction and are likely to be preferred by customers looking for a higher performance. Arista expects to see the deployment of Jericho-based systems in Summer 2016. The advantages of the chipsets lie in their longer qualification cycle for core routing and spine application.

The comments by Arista management on the two technologies bode well for Broadcom, the analyst said.