Arista Networks Delivers Strong Q4 Results, But Stock Drops on Meta Revenue Decline

Evercore ISI lowered its price target on Arista Networks (NYSE:ANET) to $100 from $130 while reaffirming an Outperform rating, citing tariff-related earnings pressure and a cautious market narrative. Despite a 33% year-to-date drop in the stock and bearish sentiment fueled by speculation of lost business at Meta and Oracle, Evercore believes the downside risks are overstated.

The firm contends that Arista remains well positioned to meet its $750 million AI back-end revenue target and maintain its full-year revenue guidance, even under one of the most pessimistic outlooks the stock has seen in years. While some believe Arista will struggle to achieve more than high-teens growth in 2025, Evercore anticipates growth in the low 20s, supported by ongoing gains in enterprise networking and potential upside from Apple’s growing AI infrastructure investments.

Tariffs are expected to modestly weigh on margins, prompting a 2% EPS trim per quarter due to a 10% import tax on non-China sourcing. However, Arista’s global manufacturing footprint in Mexico and Malaysia helps cushion the blow. Evercore sees the upcoming Q1 earnings on May 6 as a potential positive catalyst for shares and has added ANET to its tactical outperform list, maintaining its top pick status despite the price target cut.

Evercore ISI lowered its price target on Arista Networks (NYSE:ANET) to $100 from $130 while reaffirming an Outperform rating, citing tariff-related earnings pressure and a cautious market narrative. Despite a 33% year-to-date drop in the stock and bearish sentiment fueled by speculation of lost business at Meta and Oracle, Evercore believes the downside risks are overstated.

The firm contends that Arista remains well positioned to meet its $750 million AI back-end revenue target and maintain its full-year revenue guidance, even under one of the most pessimistic outlooks the stock has seen in years. While some believe Arista will struggle to achieve more than high-teens growth in 2025, Evercore anticipates growth in the low 20s, supported by ongoing gains in enterprise networking and potential upside from Apple’s growing AI infrastructure investments.

Tariffs are expected to modestly weigh on margins, prompting a 2% EPS trim per quarter due to a 10% import tax on non-China sourcing. However, Arista’s global manufacturing footprint in Mexico and Malaysia helps cushion the blow. Evercore sees the upcoming Q1 earnings on May 6 as a potential positive catalyst for shares and has added ANET to its tactical outperform list, maintaining its top pick status despite the price target cut.

JPMorgan analysts maintained an Overweight rating on Arista Networks (NYSE:ANET) with a $140 price target, adding the stock to the Analyst Focus List as a compelling growth opportunity following its recent pullback.

The decline in Arista’s stock has been driven by concerns over AI-related spending cuts from cloud providers and potential market share losses to white-box competitors. However, JPMorgan believes these risks are overstated and unlikely to significantly impact Arista’s long-term growth trajectory.

Currently, Arista shares are trading at 28x projected 2026 earnings, which, while not at a deep discount, still leaves room for substantial upside. The firm sees multiple growth catalysts, including stronger-than-expected earnings in 2025 and accelerating revenue growth in 2026 and 2027, fueled by rising Ethernet adoption in AI data centers and increasing customer demand for Ethernet-driven AI infrastructure.

With earnings momentum and valuation expansion potential, JPMorgan views Arista as well-positioned for long-term gains.

JPMorgan analysts maintained an Overweight rating on Arista Networks (NYSE:ANET) with a $140 price target, adding the stock to the Analyst Focus List as a compelling growth opportunity following its recent pullback.

The decline in Arista’s stock has been driven by concerns over AI-related spending cuts from cloud providers and potential market share losses to white-box competitors. However, JPMorgan believes these risks are overstated and unlikely to significantly impact Arista’s long-term growth trajectory.

Currently, Arista shares are trading at 28x projected 2026 earnings, which, while not at a deep discount, still leaves room for substantial upside. The firm sees multiple growth catalysts, including stronger-than-expected earnings in 2025 and accelerating revenue growth in 2026 and 2027, fueled by rising Ethernet adoption in AI data centers and increasing customer demand for Ethernet-driven AI infrastructure.

With earnings momentum and valuation expansion potential, JPMorgan views Arista as well-positioned for long-term gains.

Arista Networks (NYSE:ANET) posted better-than-expected fourth-quarter earnings and revenue, while issuing an upbeat forecast for the current quarter, as the AI-driven surge in data center expansion continues to fuel demand for its networking equipment.

The company, which counts tech heavyweights Meta Platforms and Microsoft as key clients, has been leveraging the AI boom to drive sales of its Ethernet switches and routers, critical components for next-generation data centers.

For Q4, Arista reported adjusted earnings per share of $0.65 on revenue of $1.93 billion, surpassing analyst estimates of $0.57 per share and $1.90 billion in revenue. The company noted that it outperformed expectations across all key financial metrics.

Looking ahead, Arista projects Q1 revenue between $1.93 billion and $1.97 billion, ahead of Wall Street’s forecast of $1.91 billion, signaling continued strong customer demand.

Despite the positive outlook, some uncertainties loom over near-term growth. Analysts have pointed to potential delays in a Microsoft-related project and unclear timelines for Nvidia’s new AI-optimized Blackwell chips, which could affect Arista’s deployment cycles.

Market volatility in AI-driven tech stocks has also pressured Arista’s share price in 2025, especially after the emergence of a low-cost, open-source AI model from Chinese startup DeepSeek raised concerns about whether mega-cap tech firms will sustain their massive AI spending levels.

Adding to investor jitters, Morgan Stanley analysts highlighted a 17% year-over-year decline in revenue from Meta, calling it a key trend to watch. While they acknowledged the near-term weakness, they maintained a bullish stance on Arista’s long-term outlook, viewing pullbacks as a buying opportunity. As a result, the company’s shares fell more than 6% intra-day today.

• Arista Networks, Inc. (NYSE:ANET) underwent a 1-for-4 stock split, adjusting share prices but not the company's market value.
• Stock splits, though less common, remain significant in the market, with companies like Broadcom and Nvidia also participating in similar actions.
• Despite stock splits attracting investor attention, other factors such as market conditions and company performance play more crucial roles in stock prices.

On December 4, 2024, Arista Networks, Inc. (NYSE:ANET) underwent a 1-for-4 stock split. Arista Networks is a leading provider of cloud networking solutions, competing with companies like Cisco and Juniper Networks. The stock split means that for every four shares owned, shareholders now have one share, effectively increasing the share price while maintaining the company's overall market value.

Stock splits, like the one ANET executed, have become less common but still hold significance in the market. As highlighted by 24/7 Wall Street, major companies such as Broadcom, Chipotle Mexican Grill, Sony, and Walmart have also announced stock splits recently. These events often generate interest as they can influence stock performance, although they do not change the company's market capitalization.

Nvidia's 10-for-1 stock split in June serves as a notable example. Despite the split, Nvidia's stock traded between $99 and $135 per share until October, with investor concerns about chip shipment delays impacting its price more significantly. This highlights that while stock splits can attract attention, other factors often play a more crucial role in determining stock performance.

Arista Networks, along with Palo Alto, is set to join the ranks of companies like Nvidia, Broadcom, and Super Micro in announcing stock splits for 2024. ANET's stock is currently priced at $414.46, reflecting a 1.06% increase. The stock has fluctuated between $406.41 and $416.19 today, with a 52-week high of $431.97 and a low of $212.47. The company's market capitalization stands at approximately $130.53 billion, with a trading volume of 1,763,441 shares today.