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On Tuesday, Citi analysts increased their price target on Arista Networks (NYSE:ANET) to $112 from the previous $97, while maintaining a Buy rating on the stock. The revision reflects the firm’s expectation that Arista will double its market share in the Ethernet AI back-end sector by the fiscal year 2025 (FY25). According to InvestingPro data, 17 analysts have recently revised their earnings estimates upward, with the current analyst consensus maintaining a strong Buy rating at 1.7.
Arista Networks has shown a notable increase in its portion of the Ethernet AI back-end network market, growing from 6% in the first three quarters of 2024 to approximately 11% for the full year, according to data from Dell’Oro. This growth trajectory suggests that Arista is well on its way to hitting its targeted $750 million revenue for the AI back-end in FY25, which would represent close to a 20% market share based on Dell’Oro’s projections.
The optimism from Citi analysts stems from the anticipated upward revisions to Arista’s FY25 and FY26 estimates in the second half of the year, bolstered by better visibility on tariffs. The analysts’ confidence in Arista’s performance and the broader market conditions have led to an increase in the target price (TP) multiple from 32x to 37x FY26 earnings.
The Citi statement highlighted Arista’s significant progress in the AI market share and the application of higher market multiples as the primary reasons for the increased price target. Despite the new price target, the analysts have left their estimates and Buy rating for Arista Networks unchanged.
In other recent news, Arista Networks reported impressive first-quarter earnings for 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.65, exceeding the forecasted $0.59, and posted revenues of $2.01 billion, higher than the anticipated $1.97 billion. Despite these strong results, the company has maintained its full-year 2025 revenue growth forecast at 17%, indicating a flat revenue outlook for the second half of the year. Barclays (LON:BARC) and Needham both adjusted their price targets for Arista Networks, with Barclays lowering it to $119 and Needham to $130, while maintaining an Overweight and Buy rating, respectively. Barclays highlighted Arista’s potential to achieve a long-term revenue goal of $10 billion earlier than planned, while Needham noted the looming uncertainty due to potential U.S. tariffs. Citi, on the other hand, raised its price target to $97, maintaining a Buy rating, and expressed optimism about future data center spending. Arista Networks’ management has expressed caution regarding the second half of 2025 due to tariff uncertainties but remains confident in their AI customer momentum. The company continues to experience broad-based momentum, particularly in AI networking infrastructure, which has contributed significantly to its revenue growth.
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