Arista Networks' (ANET) raised full-year revenue growth outlook still likely understates the company's momentum, as underlying demand was not a concern heading into the quarter given strong product deferred revenue set to flow through in the second half of the year, UBS said in a note Tuesday.
The firm said Arista's improved ability to navigate the supply chain backdrop marked a key positive, particularly after more cautious commentary from the company three months earlier had pressured shares.
UBS said growth in product deferred revenue and purchase commitments points to further revenue upside in the current year and increased visibility into next year.
The firm views the company's decision to leave its AI revenue target unchanged as strategic, noting AI-related demand appears to have strengthened.
UBS maintained its buy rating on the stock and increased its price target to $259 from $187.
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