Shares of software-driven cloud networking company Arista Networks Inc. (ANET) continue to increase this week after spiking 12% on Friday following its blowout quarterly earnings report. Trading up 2.5% on Monday afternoon at $206.49, ANET reflects a whopping 113.4% gain year-to-date (YTD) versus the S&P 500’s 15.8% rally over the same period.

Following the earnings beat, in which current quarter guidance also exceeded forecasts, one team of Street analysts foresees further upside in shares as Arista steals market share away from legacy networking leader Cisco Systems Inc. (CSCO). (See also: Arista Poised to Grab 400G Market: Morgan Stanley.)

Acceleration of Cloud Adoption  

D.A. Davidson analyst Mark Kelleher lifted his rating on shares of Arista to buy from neutral. Founded in Santa Clara, Calif. by a team of ex-Cisco executives, the tech firm has benefited from the rapid adoption of cloud computing, noted the analyst.

“With new router products now in the market and the move to large cloud data centers accelerating, we believe the company is poised for years of strong growth and market share gains at Cisco Systems’ expense,” wrote Kelleher. The analyst lifted his 12-month price target from $180 to $224, reflecting an approximate 8.5% upside.

Also this week, analysts at Needham released a research note deeming results “impressive” despite lower-than-expected sales results for hyperscale customers such as cloud computing operator Microsoft Corp. (MSFT). After posting over 50% growth in sales to Microsoft and others in the past three quarters, Arista said its purchases were delayed due to the extra time needed to comply with a court-ordered redesign of its gear tied to its long-running legal battle with Cisco.

While remaining bullish overall, maintaining a buy rating on ANET and raising his price target from $175 to $217, Needham analyst Alex Henderson indicated that he is still “concerned by valuation and looming comparisons.” (See also: Buy Arista, Equinix on Cloud Dominance: Berenberg.)

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