YB new stock pitches (Thu, May 1)

Arista Networks, a leader in cloud networking, leverages its proprietary software (EOS and CloudVision) on the standard Ethernet architecture to compete with Nvidia's InfiniBand in the AI space. While InfiniBand dominates AI training with 90% market share due to its ultra-low latency, Arista focuses on scalability and cost-effectiveness, holding a strong position in the Ultra Ethernet Consortium (scheduled for 2025-2026 deployment) against Nvidia's proprietary Spectrum-X. The company generates 80% gross margins on services and 60% on hardware, maintaining a debt-free balance sheet with ongoing share buybacks. Led by CEO Jayshree Ullal and co-founder Andy Bechtolsheim, Arista consistently ranks first in customer satisfaction across all categories. The global AI datacenter market is projected to reach $100 billion by 2030, growing at 30% CAGR, with the US market growing at 25.3% CAGR from 2025-2030. Despite trading at 31.4x NTM P/E and 24x NTM EBITDA, Arista's 18% revenue CAGR and mid-20s ROIC support projections of 25%+ IRR over the next three years.

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Pancontinental Energy (PCL.AX) holds a 75% operator interest in Namibia's Orange Basin PEL 87 (Saturn Superfan) with a market cap of only $41 million, significantly undervalued compared to similar blocks. Following Woodside's exit, which appears driven by their shift to LNG and climate strategy rather than geological concerns, Pancontinental is in a stronger farmout negotiating position with the 3D seismic ($35 million) already completed and impressive prospective resource estimates (1.2 billion barrels P50, up to 3.8 billion barrels high estimate). As the only advanced Orange Basin block not held by a major oil company and neighboring the 10-billion-barrel Mopane discovery, PCL offers tremendous upside with the upcoming farmout potentially delivering 2-3x returns. Compared to Block 3B/4B which has 90% more oil but is valued 17x higher at $428 million, PCL presents a compelling risk/reward opportunity with 2 years of runway before needing to raise capital, though investors may face opportunity costs if the farmout process extends into late 2025.

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Xometry (XMTR) is a digital marketplace connecting businesses to 5,000+ US-based custom manufacturing suppliers, offering instant AI-driven quotes for precision parts including CNC machining, 3D printing, and injection molding. The company is perfectly positioned to benefit as the US-China trade slowdown and tariffs (up to 125%) force American companies to reshore manufacturing operations, with 42% of US manufacturers already having done so. Companies are choosing Xometry to avoid tariff penalties, shipping delays, and regulatory risks while gaining access to domestic, quick-turn manufacturing capabilities. Lockheed Martin's Senior Chief Engineer has confirmed that Xometry is winning share in aerospace and defense, being trusted for both prototypes and mid-volume runs. Xometry has established dominance in domestic quick-turn manufacturing and 'bridge production' services, making it a pure, standalone winner as companies rebuild America's manufacturing base amid the greatest tailwind the company has ever experienced.

Read the full article here. Read time: 2 min