Shares of Arista Networks Inc. (ANET) and Equinix Inc. (EQIX) got a boost this week on a bullish research note from analysts at Berenberg, who expect the two tech players to outperform the market as they dominate their areas of specialty.

Berenberg tech analyst Josep Bori initiated coverage on ANET and EQIX at buy on Tuesday. The analyst issued a $225 price target on shares of San Jose, Calif.-based Arista, a rival of Cisco Systems Inc. (CSCO) in the computer networking space. (See also: Arista Poised to Grab 400G Market: Morgan Stanley.)

Bori deems Arista “an emerging leader in cloud/datacenter networking,” with a competitive edge given its early focus on software, the “EOS” operating system.

Networking Moves to Subscription Model

“The company founders recognized back in 2004 that the next generation of cloud and enterprise datacenter networking would have significantly higher requirement in terms of performance, resilience, programmability, automation and pricing,” wrote Bori. He suggests that Arista, founded by a team of ex-Cisco employees, has been committed to building a hardware-agnostic platform from the start, making its products the most suitable in the industry for cloud computing networking models.

Bori highlights Arista’s revenues, up 43% in 2015 and 35% in 2016, expecting momentum to continue as the networking business model transitions from hardware appliances to software subscriptions. While maintaining a bullish outlook on ANET overall, the analyst notes risks including competitive pressure from software-only networking vendors such as Cumulus Networks, Big Switch and Pica8, along with “in-sourcing” from some of Arista’s largest cloud customers, such as Microsoft Corp. (MSFT), who are working on building out their own networking software.

Arista and Equinix are up 92.9% and 23% year-to-date (YTD), respectively, versus the S&P 500’s 11.7% rally over the same period. (See also: Cisco-Rival Arista to Accelerate Growth on 100G Bandwidth.)

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