2 tech stocks see big gains after hours on Monday


SStock markets ended mostly lower on Monday as a Russian invasion of Ukraine looked increasingly likely. At the close, the Nasdaq Compound (NASDAQ INDEX: ^IXIC) had almost fully recovered from his losses by mid-afternoon, but the Dow Jones Industrial Average (DJINDICES: ^DJI) and S&P500 (SNP INDEX: ^GSPC) always closed lower.


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Data source: Yahoo! Finance.

After the closing bell, however, a few stocks posted strong gains as companies released their latest financial results. Below we will take a closer look at how Arista Networks (NYSE: ANET) and Amkor Technology (NASDAQ: AMKR) wowed investors with their respective reports and what the outlook for the two stocks looks like.

Image source: Getty Images.

Arista gets a good boost

Arista Networks shares rose nearly 9% in after-hours trading on Monday. The cloud networking equipment specialist has posted impressive results that show its continued success in tapping into the efforts of enterprise customers looking to take full advantage of technology innovation.

Arista’s financial results appeared strong. Fourth-quarter revenue was $825 million, up 27% year-over-year. Adjusted net earnings increased 33% from prior year levels to $262.4 million, equating to adjusted earnings of $0.82 per share. The numbers capped off a strong year for Arista, which included a 27% increase in sales to $2.95 billion and a 27% gain in adjusted net income to $915 million.

Additionally, investors appreciated what they heard of Arista’s guidance for the first quarter of 2022. Management estimates it should see sales of $840-860 million, with margin numbers roughly consistent with what society has seen in recent times.

Enterprises have transitioned to 400G networking equipment to take full advantage of cloud capabilities for data collection and analysis, and Arista has been a pioneer in providing the high-end equipment that many corporate customers prefer. Cloud computing is a trend that won’t stop any time soon, and many investors still see many good times ahead for Arista.

Amkor keeps snacking

Shares of Amkor Technology also rose sharply after the company released its fourth quarter financial results. The semiconductor stock rose nearly 9% in after-hours trading.

Amkor’s numbers reflect the semiconductor industry’s continued strength amid chip shortages in several key areas. Quarterly revenue hit a new record high, rising 26% year-over-year to $1.72 billion. Net income also hit a record $217 million, producing earnings of $0.88 per share. Full-year numbers looked equally strong, with sales up 22% to $6.14 billion and earnings of $2.62 per share.

Investors didn’t appear to be worried about a sequential slowdown likely to occur in the first quarter of 2022. Amkor gave guidance for revenue of $1.5 billion to $1.6 billion, with profit likely to rise to $1.5 billion. range between $0.45 and $0.65 per share. Yet shareholders instead focused on positive comments from CEO Giel Rutten, who cited Amkor’s strong relationships with suppliers and customers as well as high levels of plant utilization and disciplined execution of business as factors contributing to business success.

Semiconductor inventories have done quite well lately, and while Amkor has hit recent highs, it’s still well above its late 2010s-2020s trading level. The company isn’t as well-known as some of its peers, but it has the potential to continue to gain momentum in a strong industry.

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Dan Caplinger has no position in the stocks mentioned. The Motley Fool owns and recommends Arista Networks. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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