William Blair analyst Sebastien Naji has reiterated their bullish stance on ANET stock, giving a Buy rating yesterday.
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Sebastien Naji has given his Buy rating due to a combination of factors that highlight Arista Networks’ strong market positioning and growth potential. The company’s robust presence as a leading Ethernet networking vendor is bolstered by growth opportunities in both AI and enterprise sectors, which are expected to drive significant earnings per share growth over the coming years. Additionally, with the stock price having decreased by over 20% from its peak, there is an attractive entry point for investors looking towards 2026.
Arista’s management has effectively addressed concerns regarding competition from white box solutions, emphasizing that these have coexisted with OEM solutions among major cloud customers like Meta and Microsoft. The company’s unique revenue recognition model, which accounts for acceptance criteria post-deployment, provides a more accurate reflection of its current momentum, as evidenced by a 27.5% revenue growth in the third quarter and an 87% increase in deferred revenue. Furthermore, despite industry interest in co-packaged optics, Arista’s hyperscaler customers are not yet demanding this technology, preferring to stick with more reliable copper and pluggable optics solutions.
In another report released yesterday, Bank of America Securities also maintained a Buy rating on the stock with a $175.00 price target.