By Sam Boughedda
Wells Fargo analysts raised the firm's price target for Arista Networks (NYSE:ANET) shares to $200 from $170, maintaining an Overweight rating on the stock in a research note Wednesday.
The analysts told investors the price target increase follows Arista introducing the WAN Routing System.
"At their Nov '22 Analyst Day, Arista outlined Routed WAN as one of the areas of adjacent mkt expansion—e.g., Arista 2.0 (2023-2025) vision," the analysts explained. "ANET estimated that the Transit & Edge WAN Routing market would represent a $2-$3B+ incremental opportunity w/ products intro in 2023. Gartner's recent (Dec' 22) forecast shows the SD-WAN market growing from $4.0B in 2022 to $7.4B by 2026 (+17% CAGR)."
The analysts added that Arista revealed the new WAN Routing System combines enterprise routing, carrier/cloud internet transit capabilities, and CloudVision Pathfinder Service, reflecting Arista's focus on extending the use of its single-instance EOS (operating system) across enterprise networking domains.
"With ANET's positioning for AI network build-outs + today's announcement highlighting ANET's focus on TAM expansion, we move our PT to $200 (was $170)," the analysts concluded.