Evercore ISI lowered its price target on Arista Networks (NYSE:ANET) to $100 from $130 while reaffirming an Outperform rating, citing tariff-related earnings pressure and a cautious market narrative. Despite a 33% year-to-date drop in the stock and bearish sentiment fueled by speculation of lost business at Meta and Oracle, Evercore believes the downside risks are overstated.
The firm contends that Arista remains well positioned to meet its $750 million AI back-end revenue target and maintain its full-year revenue guidance, even under one of the most pessimistic outlooks the stock has seen in years. While some believe Arista will struggle to achieve more than high-teens growth in 2025, Evercore anticipates growth in the low 20s, supported by ongoing gains in enterprise networking and potential upside from Apple’s growing AI infrastructure investments.
Tariffs are expected to modestly weigh on margins, prompting a 2% EPS trim per quarter due to a 10% import tax on non-China sourcing. However, Arista’s global manufacturing footprint in Mexico and Malaysia helps cushion the blow. Evercore sees the upcoming Q1 earnings on May 6 as a potential positive catalyst for shares and has added ANET to its tactical outperform list, maintaining its top pick status despite the price target cut.
