Analyst Tal Liani of Bank of America Securities reiterated a Buy rating on Arista Networks (ANET – Research Report), retaining the price target of $130.00.
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Tal Liani’s rating is based on Arista Networks’ impressive revenue growth and its strategic positioning as a key beneficiary of increased AI-related spending. Arista reported a revenue growth of 25%, surpassing expectations, and an earnings per share that exceeded forecasts by $0.08. Despite concerns about Meta’s projected decline and the current lack of upside to AI guidance, Liani emphasizes the importance of the anticipated growth in Ethernet switching deployments over the next three years across various sectors, including Cloud Titans and Enterprises.
Moreover, Arista is expected to significantly benefit from the robust spending by Cloud Titans, particularly with the acceleration of growth in this segment from 25% in 2023 to 33% in 2024. The company is well-positioned to capitalize on multi-year growth opportunities as major providers like Microsoft are expected to integrate AI Ethernet, further boosting growth. Additionally, despite a decline in Meta’s spending, Liani anticipates meaningful growth in 2025, bolstered by substantial capex increases. Arista’s market share gains in the sale of advanced 800G data center switches and its expanding opportunities with other providers further support the Buy rating.
In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $118.00 price target.