Arista Networks' stock soared 7.21% at the open, continuing its positive momentum from the previous trading session.

The sharp move follows a bullish upgrade from Rosenblatt Securities, which raised its rating on Arista to "Buy" from "Neutral" and increased its price target to $180 from $165. The analyst cited the company's XPO (eXtra-dense Pluggable Optics) strategy as a key driver. This next-generation networking approach, designed for hyperscale AI data centers, addresses extreme thermal, power, and density requirements.

Rosenblatt's optimism is further fueled by Arista's strong relationships with major AI hyperscalers like Microsoft and Meta Platforms, and the potential to gain Google as a new large customer. The firm believes Arista's revenue growth could potentially exceed its guidance and approach 40% in the coming years, supported by its $5.4 billion deferred revenue balance and the expected adoption of its XPO technology.