Arista Networks Sees 20% Revenue Growth, Evercore Raises Target Price to $110

Evercore ISI has maintained its "outperform" rating for Arista Networks (ANET.US), projecting that the network company will sustain a revenue growth rate exceeding 20%. This optimistic outlook is driven by Arista's strategic partnerships with Meta Platforms and major cloud service providers. The firm's analysts, led by Amit Daryanani, highlighted that the primary growth drivers for Arista will be the cloud giants and campus networks. Evercore has also raised its target price for Arista from $105 to $110 per share.

The analysts anticipate that Arista will update its revenue guidance for the 2025 calendar year during its second-quarter earnings release at the end of July. Additionally, Meta Platforms is expected to unveil its network framework, which leverages Arista's technology, at the Open Compute Project Global Summit in October. This development is likely to benefit Arista as cloud providers increasingly seek unified infrastructure solutions.

Daryanani noted that while cloud computing growth may be robust, the decline in campus business is expected to be more gradual. He emphasized that investors should not overlook the opportunities in the campus network segment, despite the higher capitalization multiples associated with cloud AI opportunities. Arista appears to have reached a turning point in a market that has traditionally moved slowly. Cisco Systems remains the market leader but has been a consistent underperformer in the stock market. Evercore predicts that Arista's market share will rise from less than 2% in CY 24 to approximately 7% in CY 29, generating an additional $19 billion in incremental revenue.