According to the Securities Times, Morgan Stanley analyst reiterated a buy rating on Arista Networks (ANET.US) and raised the target stock price of the network solution company from $355 to $410. Morgan Stanley stated that as Ethernet continues to capture market share from broadband, Arista's momentum in the cloud and datacenter networking space continues to strengthen.

Morgan Stanley analysts Meta Marshall and Mary Lenox stated in an investor report on Thursday: "We believe that Arista's valuation of about 39 times the expected EPS for fiscal 2026 is not cheap, and the buyer's valuation is already high. However, these data points are encouraging as there are multiple growth paths, and Arista has the opportunity to gain market share in the Ethernet space from broadband."

Arista has shown stable growth this year, with the stock price more than doubling in the past 12 months. On October 11, the stock closed at a historic high of $416.93.

Due to the increased need for larger and more complex datacenter configurations for AI applications, the network company has also secured several major cloud customers this year. The company has recently begun trials on its fifth major cloud customer for the year. It is also working with Meta (META.US) on a 0.1 million GPU cluster.

Marshall pointed out: "We believe that Arista's next major catalyst will be seeing the 0.1 million Meta cluster move to deployment/revenue. However, the timing of deployment is still uncertain, depending on the bottlenecks cloud computing customers face in facilities/power/labor/expertise."

Arista plans to announce its financial performance for the third quarter of 2024 post-market trading on November 7. Analysts generally expect the company's adjusted EPS for the quarter ending September 30 to be $2.08 and revenue to be $1.76 billion.