Shares of Arista Networks (ANET 1.80%), a computer networking company, rose today after an analyst increased her price target for the stock.

Arista has emerged as a leader in the artificial intelligence (AI) networking market, which has sparked a lot of interest among investors recently.

Arista's stock was up 4.9% as of 1:31 p.m. ET.

NYSE: ANET

Arista Networks
Today's Change
(1.80%) $1.41
Current Price
$79.90
Arrow-Thin-Down
ANET

Key Data Points

Market Cap
$99B
Day's Range
$75.44 - $81.21
52wk Range
$60.08 - $133.57
Volume
4,946,318
Avg Vol
10,737,238
Gross Margin
64.13%
Dividend Yield
N/A

A networking leader capitalizing on AI

Morgan Stanley analyst Meta Marshall increased Arista's price target yesterday from a previous price of $300 to $325 and reiterated an "overweight" rating. Investors view price target increases as a positive sign for a company's stock and pushed Arista's share price higher as a result.

The recent price target increase comes as Arista's stock has received green lights across the board from analysts giving its shares a solid buy rating.

But investors have already been bullish on Arista this year. The company is a leader in the computing networking space and has emerged as a competent AI networking device and service provider. Both Microsoft and Meta use Arista's networking solutions; they accounted for 39% of Arista's sales in fiscal 2023.

Arista Networks has long been entrenched in the data center networking space, which has made it a natural fit for many AI-focused companies. Investors have taken notice of Arista's position and have pushed its share price up 91% over the past year.

Potential at a price

Arista's stock currently trades at price-to-earnings ratio of about 40, making the tech stock a pricey investment right now. But that doesn't mean it still doesn't have lots of potential.

With more than two decades in the tech space and a well-earned position in the networking market, Arista won't be unseated easily. This makes the company an interesting opportunity for investors seeking an AI play that's off the well-worn path of Meta, Microsoft, Apple, and other large tech companies.