Arista Networks' (ANET) Q4 results showed the company's margins remain resilient despite concerns about memory costs and product mix, Morgan Stanley's research division said in a note to clients Friday.

The researchers said while 2026 revenue growth guidance of about 25% may appear "conservative," it could prove low if one or two additional customers each reach 10% of revenue. Meta (META) and Microsoft (MSFT) accounted for 42% of revenue in 2025, up from 35% in 2024, and further diversification would be a positive, the researchers said.

For Q1, Morgan Stanley's researchers now estimate Arista's non-GAAP revenue at $2.60 billion and earnings of $0.79 per share, up from prior estimates of $2.41 billion and $0.70. For 2026, they forecast non-GAAP revenue of $11.27 billion and earnings of $3.40 per share, compared with previous estimates of $10.65 billion and $3.09.

Morgan Stanley's Research division kept its 'overweight' rating on the company's shares, and raised its price target to $165 from $159.

Price: 143.19, Change: +8.07, Percent Change: +5.97