Arista Networks Gets A Double Downgrade: Buy This AI Stock Instead, Says Analyst

Arista Networks Inc ANET shares tanked in premarket trading on Friday, amid concerns around AI stocks trading at a premium.

Although ethernet could prevail in the AI era, the company is unlikely to be a big winner of this trend, according to Rosenblatt Securities.

The Arista Networks Analyst: Mike Genovese downgraded the rating for Arista Networks from Buy to Sell while slashing the price target from $330 to $210.

The Arista Networks Thesis: The stock is trading at a significant premium, as investors see the company as a “large AI beneficiary,” Genovese said in the downgrade note.

Check out other analyst stock ratings.

“Investors have been debating Infiniband vs. Ethernet and assume ANET will thrive if Ethernet does,” the analyst wrote. “We believe Ethernet is a winning technology, but think most of the spoils will go to Nvidia Corp NVDA,” he added.

“While ANET will continue to compete with Cisco Systems Inc CSCO in Enterprise, the primary Data Center competitor is now Nvidia, which has significant advantages over Arista,” Genovese further wrote.

ANET Price Action: Shares of Arista Networks had declined by 6.48% to $277.35 at the time of publication on Friday.

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