Zhi Tong Cai Jing·2026-01-06 07:25Core Viewpoint - Piper Sandler upgraded Arista Networks from "Neutral" to "Overweight" and raised the target price from $145 to $159, citing the company's growing market share in data centers and enterprise campuses [1] Group 1: Business Performance - Nearly half of Arista's business comes from major clients such as Meta, Microsoft, and Oracle, with expected capital expenditures from these clients projected to grow approximately 50% year-over-year [1] - Arista has historically provided conservative guidance on sales and profit margins, with actual figures averaging 11% and 4.4% higher than initial guidance, respectively [2] Group 2: Market Strategy - The company is expected to see a shift in capital expenditure structure towards networking equipment, as full capital inflow may not be realized in the next two years [1] - The business structure is leaning towards cloud and AI giants, which may lead to a short-term decline in gross product margins (GPM) [1] - Increased investments in the enterprise market are driven by new leadership, benefits from campus network upgrades, changes in competitive landscape, and the acquisition of VeloCloud, aimed at enhancing capabilities in cognitive branch networking [1] Group 3: Acquisition Impact - Arista's acquisition of VeloCloud's SD-WAN assets from Broadcom last summer is intended to improve its capabilities in zero-touch operations and automated troubleshooting across enterprise environments [1]