TLDR:
- Goldman Sachs is optimistic about Arista Networks’ AI networking business.
- Analyst Michael Ng has a buy rating on the stock with a $356 price target.
Goldman Sachs has growing confidence in Arista Networks’ ability to exceed earnings expectations as their artificial intelligence networking business expands. Analyst Michael Ng predicts that the stock could increase by 16.9% from its current value based on strong gains in the AI sector. Ng expects Arista Networks to achieve earnings per share of $7.61 and $8.91 in 2024 and 2025, surpassing analyst consensus estimates. The company’s collaboration with Cloud Titan businesses like Meta, Microsoft, and Oracle is a key factor driving Ng’s positive outlook. Meta’s developmental initiatives, such as the AI Research SuperCluster, also contribute to Ng’s high expectations for Arista Networks. With increasing demand for AI servers and ethernet in AI networking, Arista Networks is positioned to benefit from favorable market conditions. Ng’s recommendation comes amidst a period of significant growth for Arista Networks, with the stock increasing almost 30% in 2024 after nearly doubling in value the previous year.