Arista Networks double downgraded to Sell at Rosenblatt on AI boost skepticism

Rosenblatt downgraded Arista Networks (ANET) to Sell from Buy with a $210 price target. The stock trades at its current valuation because most people believe Arista will be a large AI beneficiary, but the firm’s view is that while Ethernet is “a long-term winning technology,” Arista may not benefit as much as would be needed to support the current stock price or higher, the analyst tells investors. Though the firm thinks Ethernet is a winning technology, it also thinks most of the spoils will go to Nvidia (NVDA) and worries that Arista’s multiple may shrink as investors realize its AI opportunity is smaller than most expect.