AI's NEXT Magnificent Seven

The original Magnificent Seven produced 16,894% average returns over 20 years. But the man who called Nvidia at $1.10 says "AI's next Magnificent Seven could do it even faster." See his breakdown of the seven stocks you should own here.

F5 Sees Big Wins in Multi-Cloud, AI Security, and IT Refresh, Analysts Forecast More Upside

Anusuya Lahiri
January 29, 2025

F5 Inc (NASDAQ:FFIV) stock is trading higher Wednesday after the company reported better-than-expected first-quarter financial results and issued strong second-quarter revenue guidance.

F5 reported first-quarter revenue of $766.49 million (versus $692.6 million year-on-year), which beat the analyst consensus estimate of $715.41 million. EPS of $3.84  beat the analyst consensus estimate of $3.36.

Also Read: ADP Q2 Earnings: Revenue And EPS Beat, Record Client Satisfaction and Strong HCM Demand, Reaffirms FY25 Outlook

F5 expects second-quarter revenue of $705 million—$725 million, versus the $702.73 million estimate, and EPS of $3.02-$3.14, versus the $3.21 estimate. Wall Street analysts rerated the stock amid an exciting earning season.

Several analyst raised their price forecasts:

  • Piper Sandler analyst James Fish maintained F5 with a Neutral and raised the price target from $246 to $304.
  • Needham analyst Matt Dezort reiterated F5 with a Buy and raised the price target from $285 to $360.
  • Raymond James analyst Simon Leopold maintained F5 with a Hold.
  • RBC Capital analyst Matthew Hedberg reiterated F5 with a Sector Perform rating and raised the price target to $310 from $260.
  • JP Morgan analyst Samik Chatterjee maintained a Neutral rating on F5 and a price target of $296, up from $250.

Piper Sandler: Stock gained after F5 reported its most prominent beat in the company’s history, given better IT budgets, data center refresh, vendor consolidation, competitive disruption (Citrix), AI-related demand, and some pull-in of demand ahead of price increases across hardware and software.

Given all the moving parts and upsides from non-recurring sources, the question centers around growth sustainability (versus peak). Many drivers reflect Fish’s fiscal 2025 themes, and the updated guide better reflects what is happening in the environment.

Fish projected second-quarter revenue of $718.9 million and EPS of $3.14.

Needham: F5 posted an impressive first-quarter beat, guided second-quarter revenues ahead, and raised full-year guidance as new opportunities are opening up across hybrid/multi-cloud and GenAI, driven by more stable IT spending, robust software renewals, refresh activity, and improving competitive dynamics.

F5 called out a record number of ADC displacement deals in the first quarter, a trend they expect to continue.

Dezort projected second-quarter revenue of $719.85 million and EPS of $3.08.

Raymond James: The first-quarter report reflected a significant beat and a higher full-year outlook. Higher-than-expected expansion rates helped software growth, but hardware revenue provided the biggest surprise this quarter, accounting for almost two-thirds of the product upside versus Leopold’s estimate.

Management attributed the strong hardware growth to a higher-than-expected acceleration of customers refreshing their aging hardware footprint. Despite the robust first quarter, the fundamental narrative of the business mix shifting towards software and away from hardware has not changed.

F5’s products continue to be sticky within its customer base, which helps drive further adoption of hybrid-cloud deployments but also likely amplifies lumpy results in the immediate term.

Leopold projected second-quarter revenue of $718.9 million and EPS of $3.13.

RBC Capital: F5 reported strong results with outperformance across the board as software revenue grew +22% and systems revenue grew +18%. Positives included an improved IT spending environment, solid refresh activity, secular tailwinds around hybrid and AI, and an optimistic outlook.

Guidance moved higher with midpoint fiscal 2025 revenue and software revenue now pointing to 6.5% and 10%+ Y/Y versus prior expectations of 4.5% and high-single-digit. Hedberg remains impressed with the company’s growing consistency and relevancy in a hybrid cloud world.

Hedberg projected second-quarter revenue of $715.0 million and EPS of $3.08.

JP Morgan: F5 is starting to deliver consistency in executing results materially better than expectations despite operating in an uneven macro backdrop, as the robust capabilities across multi-cloud and AI are helping in competitive wins and enabling consolidation of customer wallet share.

While on the surface, Enterprise IT spending is still lackluster in the aggregate, the increasing complexity of managing a multi-cloud environment drives customers to F5’s solutions, given the depth and breadth of its capabilities relative to the closest competitor.

About these wins, F5 is seeing substantial expansion of deal sizes with customers in their renewals.

Additionally, with managing complexity around AI also on the horizon for Enterprise customers, F5 is starting to see demand to support secure data delivery for RAG as well as secure API access and also awaiting opportunities to leverage its partnership with Nvidia about load balancing in AI clusters in the time to come, although the deal sizes are smaller at this time, they are likely to expand (as F5 is already seeing with one customer) and become a more material driver of growth in the medium term.

Led by the robust portfolio supporting multi-cloud and AI for customers, F5 can balance strong business momentum with price increases across hardware and software, further increasing visibility into the stickiness of F5 solutions with its customers. Chatterjee projected second-quarter revenue of $715.0 million and EPS of $3.08.

Price Action: FFIV stock is up 10.8% at $299.00 at last check Wednesday.

Also Read:

  • MSCI Q4 Earnings: Beats EPS Estimates, Boosts Dividend 12.5%, ESG And Index Revenues Drive Growth, Higher Margins, $1.4 Billion+ Free Cash Flow Projection

Photo via Shutterstock

Continue Reading...

Popular

Top 3 Utilities Stocks That May Rocket Higher This Month

The most oversold stocks in the utilities sector presents an opportunity to buy into undervalued companies.

What to know about Trump's buyout proposal for federal employees

President Donald Trump's administration is offering to federal employees to quickly reduce the government workforce. They don't have a long time to decide: The deadline is Feb. 6.

Top-Secret Military Base in New Mexico Desert - Ad

Out in the New Mexico desert sits a top secret government facility... The scientists here are studying a new technology that will change the way wars are fought... Once you see this thing for yourself -- you'll know in your heart it could be coming for all of us. That's why I've taken steps to help protect myself and my family from what could be unleashed as early as April 11.

Trump's Commerce Secretary nominee, Howard Lutnick, vows to sell his business interests in 90 days

WASHINGTON (AP) — Billionaire financier Howard Lutnick, President Donald Trump's choice to lead the Commerce Department, said Wednesday that he would sell all of his business holdings within 90 days.

Hawaii wildfire victims spared from testifying after last-minute deal over $4B settlement

HONOLULU (AP) — Lawyers representing victims of a deadly Hawaii wildfire reached a last-minute deal averting a trial Wednesday to determine how to split a .

Love or Hate Him -- You Have To See What Elon Could Do Next - Ad

It's not electric vehicles, green energy or space travel that Elon Musk will be remembered for.

A South Florida luxury condo project is planned for site where building collapse killed 98 people

SURFSIDE, Fla. (AP) — A Dubai-based developer plans to build a 12-story luxury condominium project on the South Florida site where in 2021, killing 98 people.

Microsoft reports 10% quarterly profit growth as it works to show AI investments paying off

REDMOND, Wash. (AP) — Microsoft Corp. said Wednesday that its profit for the October-December quarter grew 10% from the same time last year as it works to capitalize on the huge amounts of money it has spent to advance its artificial intelligence technology.

Urgent Bitcoin Alert for Right Now - Ad

"Bitcoin Skimming" could help you multiply Bitcoin gains by up to 22x. Former billion-dollar hedge fund manager Larry Benedict reveals his strategy that everyone needs to understand. And the wild thing? You don't even need to buy, sell, or own Bitcoin to do this.

Stock market today: Asian stocks advance ahead of the Fed's rate decision as panic over AI fades

HONG KONG (AP) — Asian stocks advanced Wednesday in thin Lunar New Year trading following a rebound on Wall Street driven by tech stocks as the panic over Chinese AI company DeepSeek faded.

Elon Musk Is 'Kind Of Glad' Many Didn't Pick Up A Tesla FSD Subscription: Here's Why

Tesla Inc CEO Elon Musk said on Wednesday that the company will likely have to update hardware for customers whose vehicles are equipped with an older version of the AI hardware called Hardware 3, for it to achieve fully unsupervised autonomous driving with full self-driving (FSD) driver assistance software.

Legendary Wall Street Stock Picker Names No.1 AI Stock of 2025 - Ad

Marc Chaikin's system has detected another bewildering trend in the U.S. stock market. And he says this stock could shoot sky-high in the new year as a direct result. To hear it for yourself, click here. You'll get this stock's name and ticker symbol, absolutely free.

Shiba Inu's Shytoshi Kusama Teases 'Extremely Powerful Partnership' -- Coin Themed On Him Rallies 25%

Shiba Inu (CRYPTO: SHIB) lead ambassador Shytoshi Kusama hinted at a major partnership announcement for the blockchain ecosystem on Tuesday, stirring up excitement among enthusiasts.

3 coup-hit West African nations formally leave ECOWAS in an unprecedented disintegration

ABUJA, Nigeria (AP) — The of Niger, Mali and Burkina Faso have formally withdrawn from the regional bloc known as ECOWAS, the body said Wednesday, the culmination of a yearlong process during which the group tried to avert its unprecedented disintegration.

My TOP Altcoin for Right Now Is... - Ad

Searching for the top investment opportunity in crypto? Look no further. Our $3 report gives you the full scoop. You'll get this exciting token's name, our recommended investment strategy, and growth projections. Time is of the essence with this one...

7 AI Infrastructure Stocks Plunge Over 20%, Outpace Semiconductor Rout As DeepSeek Upends Investment Landscape

The launch of DeepSeek affects the AI boom including the power, cooling and data center giants that once rode the AI euphoria, which now have single-day losses exceeding 20%.

Fartcoin Loses Shine Against SHIB, DOGE, Plunges 50% In 7 Days: Is This A Prime Buying Opportunity?

Fartcoin (CRYPTO: FARTCOIN) has dropped significantly from highs set one week ago, but traders on social media remain adamant about the meme coin’s future prospects.

Alex Green Reveals The Top Trump Trades for 2025 - Ad

Wharton's Jeremy Siegel says Trump is "the most pro-stock market president we've had in our history." Now, with Trump's new economic blueprint in place, Alex Green has identified a handful companies that could lead the next wave of wealth creation... And he's revealing the names and ticker symbols, free of charge.

Chubb CEO Expects $1.5 Billion Loss From LA Wildfires: 'California Is A Difficult Market For Insurance Companies'

Chubb held its fourth-quarter earnings call on Wednesday and addressed the future financial impacts resulting from the recent California wildfires. 

Legendary Investor: Buy These "Trump Stocks" Now - Ad

Within the first week of Trump's election, several stocks exploded for double- and triple-digit gains. According to legendary investor Louis Navellier, this is just the beginning of what could be the best four-year period for stocks in U.S. history.

6 Clean Energy Stocks Face Challenges, Opportunities Ahead Of Earnings

Analyst revises ratings/price forecast on clean energy stocks ahead of earnings release. Highlights key areas to watch for each company.

JFK, 9/11... And Now This? - Ad

Jim Rickards says we'll never forget April 11, 2025. Jim outlines a crash so terrible it may even have the power to wipe out the checking and savings accounts at your bank... Along with 40% of the market. Jim is one of America's best geopolitical analysts... All you need to know is in a quick summary of his latest book.

Dubai International Airport, busiest for world travel, sees record 92.3 million passengers in 2024

DUBAI, United Arab Emirates (AP) — Dubai International Airport, the world's busiest for international travel, saw a record 92.3 million passengers pass through its terminals in 2024, officials announced Thursday.

3 ETFs Shine As Trump's First Week Sparks Record Gains Followed By Tech Slump

The S&P 500 had a strong first week, with ETFs such as SPY, VOO and IVV seeing gains. Were Trump's economic policies a factor?

What Bill O'Reilly Said Floored Me - Ad

Bill O'Reilly has trusted one expert for investment advice for over 20 years... Alexander Green. Now, Alex is revealing Trump's impact on YOUR Money, like how AI technology could amplify Trump's policies and details on 3 stocks that could rise 20-fold by 2029.

Hong Kong's snake soup is slithering away but still simmers in a decades-old kitchen

HONG KONG (AP) — As Hong Kong prepares to welcome the Year of the Snake on Wednesday, Chau Ka-ling displays a moving serpent with practiced ease, holding it like a pet in her decades-old restaurant in the city.

Apple Surprises Users With Starlink Beta, Teams Up With Elon Musk's SpaceX And T-Mobile To Bring Satellite Texting For iPhone Users In iOS 18.3

Apple has partnered with SpaceX and T-Mobile to bring Starlink satellite texting to iPhones, with a limited beta test rolling out via iOS 18.3, marking a major step toward expanding connectivity in remote areas.

Nvda: Correction or Full-Blown Crash? - Ad

It's clear that powerful headwinds are headed for NVDA in 2025. Analysts on and off Wall Street say to load up on THIS ticker instead. It's an under-the-radar AI stock that just hit a 52-week high. Marc Chaikin, to talk about the future of the red-hot AI trend... And he named this same stock as his #1 AI pick for 2025.

Europe's economy showed zero growth at end of 2024 as Germany, eurozone's biggest economy, struggled

FRANKFURT, Germany (AP) — Europe’s economy stagnated at the end of last year as its former growth engine, Germany, finished a second straight year of shrinking output, officials said Thursday.

Tesla Stock Rises 5% After-Hours On FSD And New Vehicle Promises Despite Q4 Revenue Miss

Tesla Inc stock rose as much as 5% after hours over the company's promises of launching new and "more affordable" models in the first half of 2025, in addition to other promises regarding the deployment of autonomous vehicles and licensing of the company's full self-driving (FSD) driver assistance software to rivals.

Elon Musk: "The Government Is Out of Control." - Ad

Elon Musk says the government is going bankrupt. Seniors are getting crushed by inflation. But there is a way you could claim a chunk of over $1 trillion in spending, courtesy of Elon Musk.

Spain's leader wants the EU to 'make social media great again.' Here's how

DAVOS, Switzerland (AP) — Spanish Prime Minister is launching a crusade against what he sees as the downsides of .

Trains canceled across Bangladesh as rail union goes on strike

DHAKA, Bangladesh (AP) — Trains were canceled across Bangladesh on Tuesday as railway staff went on strike for higher pensions and other benefits, affecting tens of thousands of passengers and freight transport.

2025's No. 1 Trump Era Trade - Ad

Elon Musk is warning about a major shortage we will face in 2025. Trump is targeting one specific resource as the solution to the problem. One American company is virtually the only company set up to solve this situation... generating billions in sales.

US cyber agency's future role in elections remains murky under the Trump administration

WASHINGTON (AP) — The nation’s cybersecurity agency has played in helping states shore up the defenses of their voting systems, but its election mission appears uncertain amid sustained criticism from Republicans and key figures in the Trump administration.

Firings, freezes and layoffs: A look at Trump's moves against federal employees and programs

CHAPIN, S.C. (AP) — Changeover among federal government agencies is normal when a new administration comes to Washington. But President has implemented in the first days of his second administration, from firing career agency employees to freezing trillions in federal grant funds and halting diversity, equity and inclusion programs that could result in wide-ranging layoffs.

Bill Gates' Next Big AI Bet: Stargate Could Be a Game-Changer - Ad

Jeff Brown, the tech expert who predicted Bitcoin, Nvidia, and Tesla, reveals Bill Gates' new AI project, Stargate. Could this be the next big AI breakthrough?

Bank of America's Sensitive Customer Data Compromised in Third-Party Hack - Is Your Account Safe?

Bank of America (NYSE: BAC) has confirmed a data breach involving a third-party software provider that led to the exposure of sensitive customer data.

Trending Now

Information, charts or examples are for illustration and educational purposes only and not for individualized investment management This message contains commercial elements, such as advertising. We only send these offers to those who have opted in to our newsletter. Past performance is not indicative of future results. For these reasons we strongly suggest trading in a DEMO/Simulated account. The information provided by us is for educational and informational purposes only. We make no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended and have not determined if the statements and opinions of the advertiser are accurate, correct or truthful. If you use, act upon or make decisions in reliance on information contained or any external source linked within it, you do so at your own peril and agree to hold us, our officers, directors, shareholders, affiliates and agents without fault.

Copyright finstrategist.com
Privacy Policy | Terms of Service