The shift back from value to growth investments and fundamental upside potential make shares of Arista Networks Inc (NYSE: ANET) more attractive than Cisco Systems Inc (NASDAQ: NASDAQ:CSCO), according to Wells Fargo (NYSE:WFC).
The Network Equipment Analyst: Aaron Rakers upgraded the rating for Arista Networks to Overweight, while raising the price target from $142 to $160. The Wells Fargo analyst also downgraded the rating for Cisco Systems to Neutral, while lowering the price target from $70 to $65.
The Network Equipment Thesis: Arista Networks is well-positioned “for a strong 400G hyperscale cloud upgrade cycle” with increasing visibility into incremental growth via “AI-centric infrastructure leveraging Ethernet core switching/routing to connect 1,000s of CPUs, GPUs, and DPUs,” Rakers said in the note.
“Arista’s significant inventory + purchase commitment expansion” is an indicator of “potential revenue upside,” he added.
“We are not making a negative/downside fundamental call on Cisco, and we maintain a positive long-term view on the company’s subscription model execution and incremental webscale traction. We do, however, think shares of CSCO could remain more range bound,” the analyst further wrote.
Photo: Gerd Altmann from Pixabay
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read at Benzinga