Shares of Arista Networks Inc (NYSE:ANET) tanked in early trading on Wednesday despite an upbeat first-quarter (Q1) report.

Key Analyst Insights

• Rosenblatt Securities analyst Mike Genovese maintained a Buy rating, while raising the price target from $180 to $210.
• JPMorgan analyst Samik Chatterjee reiterated an Overweight rating and price target of $200.
• Needham analyst Ryan Koontz reaffirmed a Buy rating and price target of $185.

Check out other analyst stock ratings.

Rosenblatt Securities: Arista's total revenues grew 9% sequentially and 35% year-on-year to $2.71 billion. Genovese credited the growth to AI and the specialty providers category. Both the operating margin of 47.8% and earnings of 87 cents per share came in higher than expected, he added.

Management guided to Q2 revenues slightly above consensus. The company also raised its 2026 revenue growth to 27.7% from their prior projection of 25%, the analyst stated. The company raised revenue growth outlook only slightly due to supply shortages across wafers, silicon chips, CPUs, optics, and memory.

JPMorgan: Arista Networks has long-term growth drivers that position the company well for robust demand, Chatterjee said. While the company raised its full-year revenue guidance, the dollar amount of the raise, at $250 million, is much less than the raise in the fourth quarter of around $600 million, he added.

The entirety of the raise came from a revision to the full-year AI target, which increased to $3.5 billion. The prior outlook hovered around $3.25 billion.

For the second quarter, Arista Networks guided to revenues of $2.8 billion, which was constrained due to supply limitations, he further stated.

Needham: Arista Networks delivered a "modest" beat, which was below its typical upside to expectations, Koontz said. Total deferred revenue reached $6.2 billion in the first quarter, representing 101% year-on-year and 15% sequential growth, he added.

Management's revenue growth guidance of 27% year-on-year for the Q2 represents a deceleration from the 35% reported for Q1. "A new bigger bottleneck is emerging for high-end ASICs from Broadcom (NASDAQ:AVGO) and by extension Taiwan Semiconductor Manufacturing (NYSE:TSM) supply," Koontz said.

Price Action

Shares of Arista Networks had declined by 14.82% to $145.09 at the time of publication on Wednesday.

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