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CFBK, JBL, ANET, RL and NGG have been added to the Zacks Rank #1 (Strong Buy) List on August 13, 2025.
Recently, Zacks.com users have been paying close attention to Arista Networks (ANET). This makes it worthwhile to examine what the stock has in store.
Arista's Q2 2025 revenue and earnings beat forecasts, powered by robust demand, portfolio strength and innovative product launches.
Arista Networks' rich monetization of its new Ethernet offerings has been highly promising indeed, as observed in the double-beat FQ2'25 performance and the raised FY 2025 guidance. These numbers are well supported by the growing purchase commitments and the hyperscalers' raised capex guidance, thanks to the multi-year cloud spending trends. While ANET's customers may very well absorb the tariff impacts, there is no denying the company's decelerating growth profile and the stock's overly expensive valuations.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price.
Arista Networks delivered a blowout Q2, raising guidance and benefiting from strong AI-driven demand, but shares now trade near fair value after a massive rally. I am downgrading ANET from buy to hold, as the stock is up nearly 70% since April and now trades above 40x earnings. Key risks include heavy customer concentration (MSFT, META) and potential margin pressure from increased competition or softer AI capex.
Upgrading Arista Networks to a buy as hyperscale cloud capex creates a once-in-a-generation growth opportunity, despite a high valuation. Q2 earnings were exceptional: Arista beat on all metrics and raised FY25 revenue growth guidance from 17% to 25%. Massive, multi-year data center investments by cloud giants like Microsoft, Amazon, Google, and Meta are directly fueling Arista's growth.
Major U.S. equities indexes pushed higher in the midweek trading session, bolstered by strength in the tech sector following reports that Apple (AAPL) was preparing to announce major investments in domestic manufacturing.
Arista Networks Inc is poised for a structural rerating, driven by AI infrastructure demand and potential upward guidance for 2026–28. My $130 target price reflects premium valuation justified by superior margins, rapid EPS growth, and deep integration with Meta and Microsoft. Despite high customer concentration risk, Arista's pricing power, cash generation, and supply chain agility provide resilience and upside.