Is Arista Networks Stock (ANET) A Buy After Selloff? Analyst Makes Bullish Call

Arista Networks stock (NYSE:ANET) experienced a significant pullback last week, declining by 15.56% as October's upward momentum faltered in early November. This downturn prompts the question of whether the stock presents a buying opportunity for investors.

The recent selloff followed a period of strong performance, but several factors have contributed to the change in market sentiment. Despite the downward pressure, Arista's year-to-date performance remains positive at 20.45%, indicating underlying strength.

Despite the recent volatility, financial institutions largely maintain a positive outlook on Arista's future.

Citi recommends taking advantage of the recent price decline, maintaining a Buy rating with a price target of $176. Citi projects a robust 28% sales growth for fiscal year 2026, underscoring confidence in Arista's long-term prospects.

UBS reaffirmed its “Buy” rating with a $155 price target, highlighting a bullish outlook for calendar year 2026. UBS anticipates revenue growth of 20%, reaching $10.5 billion, driven by investments in AI infrastructure and data center expansions from major clients like Meta, Microsoft, and Oracle.

Barclays also increased its price target from $119 to $151, maintaining an “Overweight” rating, signaling confidence in Arista's growth trajectory and market position.

Goldman Sachs raised its price target from $115 to $155, upholding a “Buy” rating while emphasizing Arista's strong position in the AI networking sector and projecting over 20% revenue growth for 2024 and 25% for 2025.

The Competitive Landscape

However, Arista faces increasing competition, notably from NVIDIA's Spectrum-X Ethernet networking switches, which Meta and Oracle will adopt for their AI data centers. This development positions NVIDIA as a direct competitor in the networking space, potentially impacting Arista's market share. Following NVIDIA's announcement, Arista's stock dipped by 2.4%, reflecting market apprehension about this heightened competition.

Arista's recent financial results have been a mix of strong performance and cautious guidance. The company reported adjusted earnings of $2.40 per share for the third quarter, surpassing analysts' expectations of $2.09. Revenue reached $1.81 billion, exceeding forecasts of $1.76 billion. However, for the fourth quarter, Arista anticipates revenue between $2.3 billion and $2.4 billion, representing approximately 22% year-over-year growth. This projection indicates a potential slowdown compared to previous quarters, contributing to the stock's recent decline.

ANET is trading 3.23% higher in this morning's pre-market, as markets take a more risk-on approach to the new week following the U.S shutdown coming to a close.