David Lutz, managing director at Stifel, Nicolaus Capital Markets, told CNBC’s “Morning Call” that the explosion in Internet traffic makes Juniper Networks a good bet.
“First, we have Voice Over Internet Protocol,” Lutz said Wednesday. “Second, we have a lot of these video sharing sites. Last but not least is Internet Protocol TV streaming – all these Internet sites are starting to stream live video.”
He said new services and higher Internet traffic create a need for increased bandwidth. Juniper Networks designs and sells Internet Protocol routers for networks. It also designs the application-specific chips that control the routers. The company develops software to manage network traffic and firewall systems.
“At the end of the day, the Internet is nothing but a transportation system,” Lutz said. “Juniper supplies routers that build those IP networks. Over 60% of Juniper’s revenue comes from its routing product portfolio.”
The stock had fallen out of favor, but has gained about 20% this year.
“I think (Juniper's stock) has legs,” Lutz said. “…Cisco Systems is a little more exposed to the U.S. enterprise market and I think Juniper is a little more insulated from that.”