Arista Networks’ (ANET) AI Penetration Sustains Analyst Optimism

We recently published 10 Best Strong Buy AI Stocks to Invest In.  Arista Networks Inc. (NYSE:ANET) is one of the best consumer cyclical stocks.

Arista Networks Inc. (NYSE:ANET) is quite important when it comes to the AI ecosystem. The firm makes and sells switches and networking equipment that are essential for the functioning of AI data centers.

One recent strong analyst call for Arista Networks Inc. (NYSE:ANET)’s shares came on November 5th when Barclays upgraded the firm’s share price target to $183 from $179 and kept an Overweight rating. The share price target bump came after the firm’s third-quarter earnings report. While Arista Networks Inc. (NYSE:ANET)’s shares tumbled by 8% after the earnings, Barclays outlined that it expects the firm to benefit from AI and cloud computing demand. Even though Barclays has been Overweight on the firm for a while, it cut the target to $119 in May before hiking it to $151 in August and then to $179 in September. In 2022, as it set Arista Networks Inc. (NYSE:ANET) to Overweight, Barclays pointed out that growth in the campus switching and data center switching markets could allow the firm to achieve mid-teens growth for a couple of years.

Looking at hedge funds, 92 funds covered by Insider Monkey’s database had disclosed holding Arista Networks Inc. (NYSE:ANET) in their third-quarter portfolios. Arrowstreet Capital‘s position was noteworthy as it marked an 83% growth over the second quarter.

During the third quarter earnings call, when UBS’ David Vogt asked Arista Networks Inc. (NYSE:ANET)’s management about the room for growth in the non-AI and campus business, here’s what CEO Jaysrhee Ullal had to say:

“And so yelling isn’t the tone I’d like to attribute it to, excitement maybe, your enthusiasm is the one I’d like you to think about, which is clearly, AI and campus is going to grow and do great guns for us as it should because they are 2 very large TAMs. Whether it is Ken and Tyson driving the AI and cloud TAM or whether it’s Todd Nightingale driving the campus and these 2 are going to grow substantially in double digits, right? So to your point, it doesn’t leave the core business with a lot of opportunity. But that’s not to say it may be flattish, it may be grow. It’s to say that our customers are putting more attention there and that the existing business, which is already on very large numbers, will have lesser growth. We don’t yet know if it’s flattish or single digit or whether more will go to AI. We frankly can’t predict the mix this early in the game on 2026, but we think we’re in for a great ride in 2026.”

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Disclosure: None. This article is originally published at Insider Monkey.