Piper Sandler and Morgan Stanley reaffirm their positive outlook on Arista Networks (ANET), citing robust demand for high-performance networking solutions and expanding market share in cloud infrastructure. Both firms highlight the company's leadership in AI-driven data center technology.
- Arista Networks reported Q4 revenue of $1.18 billion, up 14% YoY
- Gross margin reached 69.3% in Q4, reflecting strong operational efficiency
- Subscription revenue grew 27% year-over-year
- ANET stock outperformed the tech sector by 18% year-to-date
- First-quarter 2026 guidance: $1.21B–$1.25B in revenue
- Global AI infrastructure spending projected at $350B by 2027
Arista Networks (ANET) continues to attract favorable analyst attention as Piper Sandler and Morgan Stanley maintain their buy ratings on the stock. The firms point to Arista’s growing presence in hyperscale data centers, particularly as enterprises and cloud providers accelerate investments in AI and machine learning infrastructure. Arista’s ability to deliver low-latency, high-throughput networking platforms remains a key differentiator in a competitive market. The analysts note that Arista reported fourth-quarter revenue of $1.18 billion, a 14% year-over-year increase, driven by strong demand from major cloud customers. Gross margins expanded to 69.3%, reflecting operational efficiency and favorable product mix. The company also achieved a 27% increase in subscription revenue, signaling durable growth in recurring revenue streams. These metrics underscore Arista’s transition from a hardware-centric model to a diversified, software-enabled business. Market impact is evident in ANET’s stock performance, which has outperformed the broader tech sector year-to-date by nearly 18%. Institutional investors have increased their holdings, with 45% of shares now held by long-term funds. The positive sentiment extends beyond Wall Street, with several large cloud providers publicly citing Arista as a preferred supplier for AI cluster deployments. The firm's recent partnerships with leading semiconductor firms further solidify its ecosystem advantage. Arista’s guidance for the first quarter of 2026 calls for revenue between $1.21 billion and $1.25 billion, reflecting continued momentum. Analysts believe the company is well-positioned to capture additional market share as global AI infrastructure spending is projected to reach $350 billion by 2027, with networking components accounting for over 20% of that total.