Needham Sees Comm & Enterprise Infra Budgets Intact; Priorities Shifting to Security and Cloud

Needham analyst Alex Henderson hosted a Networking and Security oriented expert call with Joe Hlavin of n2grate Technology Solutions, a data center and cloud integration firm focusing on hardware, software, and cloud services for large Enterprises and the Federal sector.
Henderson's discussion focused on C-Suites' handling of the broader macro environment, budget shifts and re-prioritization, lead times, and pricing dynamics.
Budgets for CY23 were assumed flat, but businesses prioritized data center/security and shifting to software, noted Henderson.
Lead times remained long, with firms struggling to predict supply.
Software replaced hardware where possible, especially in Federal mandating physical delivery of the product to count toward current budgets.
Pricing increases have not fully taken hold, but sales slowly added strings to significant discounts.
The call fetched positive comments from VAR for Zscaler, Inc ZS ($159.93, Strong Buy Rated, Price Target $185):, Okta, Inc OKTA ($101.95, Buy Rated, Price Target $135):, Palo Alto Networks, Inc PANW, Fortinet, Inc FTNT, SentinelOne, Inc S ($25.26, Buy Rated, Price Target $31):, and CrowdStrike Holdings, Inc CRWD ($183.53, Buy Rated, Price Target $210).
It saw Neutral comments on Arista Networks, Inc ANET ($102.38, Buy Rated, Price Target $128) and Cisco Systems, Inc CSCO ($44.46, Hold Rated).
It also saw a modestly negative view of Juniper Networks, Inc JNPR ($28.61, Buy Rated, Price Target $38).

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