Arista Gains Analyst Upgrades on AI Networking Demand Despite Supply Limits

Analysts say parts shortages look like a timing issue that could set up stronger growth in 2027.

Overview

Raymond James raised Arista to Outperform with a $164 price target, pointing to rising AI workloads that strain data center networks and play to Arista’s strengths in traffic control and telemetry.
Truist lifted its price target to $175 and called the post-earnings pullback a buying opportunity based on durable demand for cloud and AI gear.
Arista reported $2.71 billion in Q1 revenue, up 35.1% year over year, with record non-GAAP operating margin of 47.8% and guidance for about $2.8 billion in Q2 sales.
Supply constraints tied to chips and components, which analysts say could include Broadcom parts, led management to note supplier “de-commits,” or delivery delays rather than cancellations.
Analysts estimate about 40% of sales come from AI uses and say Meta and Microsoft account for over 40% of revenue, with new wins such as wide-area “scale-across” deployments and AI-focused XPO liquid-cooled optics seen as future growth drivers.