Evercore Maintains Outperform on Arista Networks as Stock Removed from Tactical List

Evercore has maintained its Outperform rating on Arista Networks (ANET), a key player in enterprise and cloud networking infrastructure, and removed the stock from its tactical investment list. The decision underscores the firm’s view that ANET is now a core, long-term holding rather than a short-term opportunity. This shift in positioning comes at a critical juncture as demand for AI-driven data center infrastructure continues to expand globally. Arista Networks reported revenue of $1.33 billion for the third quarter of fiscal 2025, representing a 24% year-over-year increase, driven by strong demand in cloud and AI networking segments. The company’s gross margin remained robust at 71.8%, reflecting efficient scaling and product differentiation. These results have positioned ANET as a critical enabler for data-intensive workloads, particularly in hyperscale environments where low-latency, high-throughput connectivity is essential. The removal from the tactical list may prompt increased allocation from institutional investors seeking stable, high-growth technology exposures. Analysts note that ANET's market share in the cloud networking segment has grown to 18% in 2025, up from 14% in 2023, with major wins at AWS, Microsoft Azure, and Google Cloud. The stock currently trades at a forward P/E of 38.5x, above the broader technology sector average, but justified by its 28% projected revenue growth over the next two fiscal years. Market participants are likely to view this re-rating as a validation of Arista’s execution and strategic alignment with AI and cloud expansion trends. The decision may also influence other sell-side firms to reevaluate their positioning on ANET, potentially leading to broader sector momentum in networking and semiconductor equipment.