New Arista Network Price Target After $2.1 Billion Projection Boost

Coming off of the company’s Q2 2026 earnings report and Tuesday night’s corresponding conference call, we are raising our price target for the Portfolio’s position in Arista Networks (ANET) to $225 from $180. In recent days that have pointed to another step up in hyperscaler capital spending and refreshed the market’s appetite for those poised to benefit, ANET shares moved past our $180 target.

In advance of Tuesday night’s results and upsized guidance, we shared our plan to revisit our price target once we’ve digested the results, guidance and management’s surrounding comments. So there is some degree of catch up in our new price target, but it is also supported by the step up in total deferred revenue and prospects for a new 10% customer beyond Microsoft (MSFT) and Meta (META). While management was tight lipped on the subject, speculation during the earnings call pointed to Arista’s planned September 8 webinar with Anthropic and Palo Alto Networks (PANW) on AI network security.

Without naming names, Arista did raise its full-year 2026 guidance for the third time this year, to $12.6 billion, implying roughly 40% annual growth. That’s $2.1 billion above the original analyst-day target and $1.1 billion above the company’s May forecast. Management did remind us that supply chain shortages exist in the form of industry-wide component tightness and that is likely to persist through 2027. That is helping temper our expectations and price target compared to some others across Wall Street. However, component price increases are expected to hit Arista after it burns through its existing backlog of components, which we take to mean in the next few quarters. That is also tempering our expectations and price target.

Here’s the thing: We took some profitable chips off of the ANET table on Tuesday following their move from under $137 in early May to our $192.98 trade price. That move, along with the other trades, allowed us to comfortably bring two new ETFs into the Portfolio, but we still have about 3.4% of the Portfolio’s assets in ANET shares. That exposure will allow us to benefit, hopefully handsomely, from the continued AI and data center buildout, and the continued ramp in networking that it drives.

During the earnings call, Arista shared that at least for now, it’s visibility is limited to around two quarters, which means its line of sight for this year is far greater than it was back in May. However, it also means its view on 2027 is still coming into focus. And it also means that, to the extend supply chain issues can be overcome, Arista should be able to convert more of the $6.9 billion in total deferred revenue exiting June at a brisker pace. With that in mind, we’ll be closely following management’s comments when it presents at the 6th Annual Rosenblatt Age of AI Technology Summit on August 18, and the Goldman Sachs Communacopia + Technology Conference 2026 on September 8.

Much like we did with Marvell (MRVL) shares, we will look for opportunities to build back our ANET position at lower prices. We will caution that the decision to do so will be weighed against prospects and entry points for other existing Portfolio positions as well as any other prospects that we may be entertaining at that time.

Finally, connecting the dots from Arista’s demand comments brings another layer of support for our view on the importance of networking in the AI and data center buildout equation, and what that means for our positions in Marvell, Broadcom (AVGO) and Nvidia (NVDA).

As we lift our ANET price target, we will also reset our checkpoint level at $145 from $134.

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At the time of publication, TheStreet Pro Portfolio was long ANET, AVGO, META, MRVL, MSFT and NVDA.