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Investing.com - Evercore ISI maintained its Outperform rating and $110.00 price target on Arista Networks (NYSE:ANET) in a research note released Monday.
The firm highlighted Meta (NASDAQ:META)’s two-layer scheduled fabric architecture for back-end networks, first announced at OCP in October 2024, as a significant opportunity for Arista. Evercore believes this architecture will be deployed for the largest and most demanding clusters, while the three-layer approach will continue serving smaller clusters.
Both Meta and Oracle (NYSE:ORCL) are expected to increase deployment of the Arista-centric two-layer approach in the second half of this year, utilizing Broadcom (NASDAQ:AVGO) Jericho and Ramon chip sets rather than Tomahawk. Evercore estimates Arista accounts for approximately 30% of spend in the three-layer architecture versus 100% in the two-layer approach.
The research firm projects that Arista will secure about 30% of back-end cloud networking spend, driving "outsized growth in CY25 and beyond." This growth potential stems from Arista’s stronger competitive position with Jericho and Ramon chipsets compared to Tomahawk-based switches.
Evercore identified three upcoming catalysts for Arista: CY25 guidance updates, OCP announcements from Meta, and Meta revenue percentage disclosure expected during fourth-quarter earnings.
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