Morgan Stanley Predicts 30% AI Network Growth for Arista Networks by 2028

Morgan Stanley has expressed a bullish outlook on Arista Networks (ANET.US), predicting that the company will have a highly attractive layout by the second half of 2025. The firm has maintained an "overweight" rating for Arista Networks, with a target price set at $100 per share. This optimistic stance is based on the company's strategic positioning and anticipated growth opportunities in the coming years.

Analyst Meta Marshall, in a client report, highlighted the growing opportunity in the artificial intelligence (AI) network market, particularly in the Ethernet segment, which is expected to grow by over 30% from 2024 to 2028. Marshall noted that Arista Networks is well-positioned to capitalize on this growth, despite concerns from investors, particularly hedge funds, about the company's share in the backend or training network market. Marshall argued that even if Arista Networks captures only half of the frontend market share, the company would still meet or exceed Wall Street's expectations.

Marshall further emphasized that the stronger performance anticipated in the second half of the year could drive Arista Networks' stock price closer to optimistic scenarios. This positive outlook is supported by the firm's belief in Arista Networks' ability to leverage its strengths in the AI network market and maintain its competitive edge. The firm's continued "overweight" rating reflects its confidence in the company's future prospects and its potential to deliver strong returns for investors.