Soaring Internet Traffic Makes Juniper a Good Bet, Analyst Says

Wednesday, 2 May 2007 | 1:34 PM ET

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.”

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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.”

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