Shares of Arista Networks (ANET 3.05%), 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.
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.
