Arista Networks (ANET) Eyes $750M AI Back-End Target; Citi Raises Price Target to $112

Citi recently raised the price target on Arista Networks, Inc. (NYSE:ANET) to $112 from $97 and kept a Buy rating on the shares. Arista engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments.

The advisory, which expects the company to double its share in the Ethernet AI back end in FY25 and anticipates upward revisions to FY25 and FY26 estimates, believes the company is on track to achieve its $750 million AI back-end target for FY25, which would reflect nearly 20% share.

The advisory's estimates are unchanged, but it raised its multiple given Arista's rising AI market share and higher market multiples.

During the first quarter earnings release, management provided Q2 guidance with expected revenues of approximately $2.1 billion. Gross margin is projected at 63%, incorporating tariff impacts. Operating margin is anticipated to be 46%, with an effective tax rate of 21.5%. For fiscal year 2025, the company reiterated its revenue guidance of $8.2 billion, citing ongoing momentum in AI and cloud businesses despite macroeconomic uncertainties.

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