BNP Paribas Downgrades Arista Networks (ANET) Stock, Reduces PT

Arista Networks Inc (NYSE:ANET) is one of the stocks that made it to our list of top 10 newsworthy upgrades and downgrades. On June 11, BNP Paribas Exane analyst Karl Ackerman downgraded the company’s stock to “Neutral” from “Outperform,” reducing the price objective to $106 from the previous target of $109. As per the firm, there are higher competitive pressures from Nvidia and low-cost whitebox vendors like Celestica and Accton. The firm opines that such new threats can take market share away from Arista Networks Inc (NYSE:ANET) in the AI networking space. Furthermore, the firm’s analyst believes that Arista Networks Inc (NYSE:ANET) is less appealing as compared to Nvidia, as the latter boasts a better profile and a lower valuation.

A technician in a server room managing a large-scale network of computers.

The analyst noted that the AI networking market continues to shift from InfiniBand to Ethernet, and Nvidia and other companies are well-placed to dominate such segment. However, Arista Networks Inc (NYSE:ANET) stated that AI, cloud, and enterprise customers have been driving network transformation. The company exceeded $2 billion in revenue for the first time in Q1 2025 despite the challenges related to tariffs. For Q2 2025, Arista Networks Inc (NYSE:ANET) expects revenue of ~$2.1 billion.

Renaissance Investment Management, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:

“Arista Networks Inc (NYSE:ANET) dropped after reporting in-line forward guidance, leading to increasing questions around the sustainability of capital investments that have driven the company’s growth. While we were disappointed with Arista’s stock reaction, we remain encouraged by strong demand for the company’s data center switching products, which remain essential to the secular growth of cloud computing.”

While we acknowledge the potential of ANET to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than ANET and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.