Arista Networks ( NYSE: ANET ) is 3% higher as analysts weigh in on the company's record-revenue quarter , where sales jumped 57% year-over-year.
That stock move higher got some new juice late Tuesday morning as BofA gave the stock a double upgrade, to Buy from Underperform.
The bank's Tal Liani had downgraded Arista a few months ago on concerns about general spending, but has reversed course after "strong 3Q22 results, solid Cloud Titan spending initiatives, and analysis of the 2023 earnings power."
The Cloud Titans vertical is now expected to make up about 45% of total fiscal 2022 revenue, up from about 30% last year, Liani notes. While the vertical is expected to grow 119% in 2022, "commentary of key cloud players points to continued infrastructure spending, and this is also reflected in Juniper’s ( JNPR ) commentary."
Meanwhile, the move higher might be a bit muted as all eyes are on Arista's Investor Day coming on Thursday. Investors are "largely looking through" Monday's print to whatever outlook comes on Thursday, Morgan Stanley's Meta Marshall said. She's a bit cautious on the "dependence on outsized growth" in Cloud Titans, and is Equal Weight with a price target of $115 (8% below current pricing).
Cowen is more bullish, raising its price target to $203, implying 63% upside. Despite ongoing supply chain impact, the magnitude of revenue and earnings per share upside stands out from competitors, analyst Paul Silverstein says.
Citi's Jim Suva also has a Buy rating, noting Arista is clearly taking share from rival Cisco Systems ( CSCO ), and he's expecting Thursday to bring guidance for sales growth in the mid-teens (and expects 2023 could bring better growth than that).
For more, dig into Arista's earnings call presentation and Seeking Alpha's transcript of the company's earnings call .
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Arista Networks rises 3% as analysts look to Investor Day