Goldman Sachs analyst Mike Ng maintained a Buy rating on Arista Networks (ANET – Research Report) yesterday and set a price target of $145.00.
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Mike Ng’s rating is based on Arista Networks’ strong financial performance and strategic positioning in the AI and cloud networking sectors. The company’s fourth-quarter 2024 earnings per share of $0.65 surpassed Goldman Sachs and consensus estimates, driven by a robust gross margin and an increased mix of enterprise and software revenues. While there were concerns about softer revenue from core cloud, AI, and data center sectors, Arista’s strategic partnerships, such as the 20% revenue share with Microsoft, demonstrate its market strength.
Ng also highlights Arista’s potential in AI cluster buildouts, with the company reiterating its $750 million back-end AI revenue target for 2025, despite some project setbacks. The modestly raised 2025 outlook of 17% year-over-year growth indicates confidence in their growth trajectory, particularly in AI and traditional cloud sectors. Arista’s EOS operating systems are noted for their excellence in AI deployments, further supporting the Buy rating.
In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $118.00 price target.