BNP Paribas Sees Celestica and Others as Top AI Stocks for 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 21 2026
0mins
Should l Buy ANET?
Source: seekingalpha
- AI Investment Outlook: Analyst Karl Ackerman from BNP Paribas highlights the durability of data center investments, predicting improved visibility through 2026 across server, networking, and storage ecosystems, which will drive up AI-related stocks.
- Price Target Increases: The firm raised price targets for Micron, Sandisk, Seagate, and Western Digital due to rising prices in DRAM, NAND, and HDD, indicating that the semiconductor sector is entering a historic upcycle.
- Strong Market Demand: The total addressable market for data center networking is expected to approach $120 billion by 2028, reflecting insatiable demand for both custom and GPU-based AI servers, further propelling growth for related companies.
- Recommended Investments: BNP Paribas recommends Celestica, Arista, and Credo as top picks, citing their significant exposure to AI infrastructure bottlenecks, making them attractive for investors to consider.
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Analyst Views on ANET
Wall Street analysts forecast ANET stock price to rise
10 Analyst Rating
9 Buy
1 Hold
0 Sell
Strong Buy
Current: 124.850
Low
159.00
Averages
172.88
High
200.00
Current: 124.850
Low
159.00
Averages
172.88
High
200.00
About ANET
Arista Networks, Inc. is a provider of data-driven, client-to-cloud networking for large artificial intelligence (AI), data center, campus and routing environments. Its platforms deliver availability, agility, automation, analytics, and security through an advanced network operating stack. Its platform is its Extensible Operating System (EOS), a modernized publish-subscribe state-sharing networking operating system. Its portfolio of products, services and technologies is grouped into various categories: Core (Data Center, Cloud and AI Networking), Cognitive Adjacencies (Campus and Routing), and Cognitive Network (Software and Services). It offers product portfolios of data-driven, high-speed, cloud and data center Ethernet switches. Its Cognitive Adjacencies include Cognitive Campus Switching, Cloud-Grade Routing and WAN Routing. Its software and services are based on subscription-based models and include various offerings: CloudVision, Arista A-Care Services, CloudEOS and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Global Giants' Involvement: Microsoft and Amazon pledged more than $50 billion for India's cloud and AI infrastructure within 24 hours, while Google announced a $15 billion investment to build its largest data center hub outside the U.S., reflecting growing global confidence in the Indian market.
- Semiconductor Projects Advancement: Currently, 10 semiconductor projects are underway across six states in India with a total investment of $18.2 billion, which not only enhances domestic chip manufacturing capabilities but also provides essential support for AI infrastructure development, further propelling industry growth.
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- Memory Chip Bottleneck: The ongoing shortage of memory chips, including high-bandwidth memory (HBM), DRAM, and NAND, has driven prices up, with Arista Networks' management highlighting supply constraints on DDR4 memory during their earnings call, indicating a persistent headwind for profitability.
- Technological Breakthrough: Google's TurboQuant algorithm, which can reduce memory usage by at least 6x and achieve up to 8x speedup, is expected to alleviate the demand for memory chips, potentially improving Arista's cost structure and enhancing its market outlook.
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- Disney Upgrade: Raymond James upgrades Disney from Market Perform to Outperform with a price target of $115, viewing the current macro backdrop and international visitation challenges as an attractive investment opportunity, reflecting optimism about its valuation.
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- Stock Price Reaction: Following the layoff news, Oracle's shares rose 2.6% in early trading, despite being down approximately 25% year-to-date, indicating a cautiously optimistic market response to the company's future strategy.
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- Investment Strategy: Nvidia's $2 billion investment for a 2.5% stake in Marvell not only provides financial support for Marvell's future growth but also allows Nvidia to benefit from any potential Marvell deals, thereby increasing its competitiveness in the AI data center market.
- Technological Interconnectivity: By extending its NVLink technology to Marvell's custom processors, Nvidia is expected to improve product compatibility, attracting more enterprises to invest in AI data centers and expanding its total addressable market.
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- Increased Spending on Traditional Servers: The shift from AI training to inference has led to increased spending in traditional servers and campus networking, enhancing market opportunities for these companies and potentially fostering long-term growth.
- Selective Investment Strategy: While maintaining a positive outlook on these stocks, Truist advises a more cautious investment approach due to some stocks nearing decade-high valuations and inflationary pressures that could impact future demand and volumes.
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See More
India's AI Industry Poised for Growth
- Accelerated Investment Inflow: Over $400 billion has flowed into India's AI ecosystem, primarily directed towards data centers and energy infrastructure, indicating a strong commitment from both government and enterprises to lay the groundwork for future economic growth.
- Global Giants' Involvement: Microsoft and Amazon pledged more than $50 billion for India's cloud and AI infrastructure within 24 hours, while Google announced a $15 billion investment to build its largest data center hub outside the U.S., reflecting growing global confidence in the Indian market.
- Semiconductor Projects Advancement: Currently, 10 semiconductor projects are underway across six states in India with a total investment of $18.2 billion, which not only enhances domestic chip manufacturing capabilities but also provides essential support for AI infrastructure development, further propelling industry growth.
- Stock Investment Opportunities: Among the 12 stocks recommended by Macquarie, companies like Reliance Industries and Bharti Airtel are expected to benefit from the construction of AI infrastructure, showcasing market recognition of their potential in the AI sector.
See More
Big Tech Plans $700 Billion Investment to Advance AI Development
- Massive Investment: Major tech companies like Google, Microsoft, Meta, and Amazon have announced plans to invest over $700 billion in 2026 to advance their AI strategies, with the majority allocated to semiconductors, which is expected to significantly enhance the competitive positioning of related firms.
- Memory Chip Bottleneck: The ongoing shortage of memory chips, including high-bandwidth memory (HBM), DRAM, and NAND, has driven prices up, with Arista Networks' management highlighting supply constraints on DDR4 memory during their earnings call, indicating a persistent headwind for profitability.
- Technological Breakthrough: Google's TurboQuant algorithm, which can reduce memory usage by at least 6x and achieve up to 8x speedup, is expected to alleviate the demand for memory chips, potentially improving Arista's cost structure and enhancing its market outlook.
- Strong Financial Performance: Arista reported record quarterly revenue of $2.49 billion in Q4, a 29% year-over-year increase, and raised its 2026 revenue outlook to $11.25 billion, demonstrating resilience amid challenges and attracting investor interest due to its growth potential.
See More
Latest Wall Street Ratings Overview
- Boeing Rating: Wells Fargo initiates coverage of Boeing with a Buy rating, forecasting a significant recovery in free cash flow as production normalizes, setting a price target of $250 based on a 20x FCF multiple on its 2028 forecast, indicating strong confidence in future growth.
- Disney Upgrade: Raymond James upgrades Disney from Market Perform to Outperform with a price target of $115, viewing the current macro backdrop and international visitation challenges as an attractive investment opportunity, reflecting optimism about its valuation.
- Microsoft Buy Rating: Benchmark initiates Microsoft with a Buy rating and a price target of $450, describing it as a juggernaut in artificial intelligence, leveraging its comprehensive portfolio of digital applications and cloud services to drive enterprise and consumer transformation, showcasing its strong market position.
- Algonquin Power Rating: Barclays initiates coverage of Algonquin Power & Utilities with an Overweight rating, citing the company's undervaluation and strong turnaround potential, indicating market confidence in its future performance.
See More
Oracle Cuts Thousands of Jobs to Support AI Infrastructure Development
- Layoff Announcement: Oracle has begun notifying its 162,000 employees about plans to cut thousands of jobs to free up cash flow for AI data center infrastructure development, which is expected to significantly reduce operating costs and enhance financial flexibility.
- Stock Price Reaction: Following the layoff news, Oracle's shares rose 2.6% in early trading, despite being down approximately 25% year-to-date, indicating a cautiously optimistic market response to the company's future strategy.
- Capital Expenditure Pressure: Oracle plans to raise up to $50 billion in 2025 through a mix of debt and equity to meet cloud service demand from clients, particularly from companies like Nvidia and Meta, reflecting strong market demand for AI infrastructure.
- Analyst Perspective: Barclays analysts noted that the layoffs will help free up cash flow and viewed this move as unsurprising, projecting that Oracle could triple its revenue over the next few years, despite lower employee productivity compared to competitors.
See More
Nvidia Partners with Marvell to Strengthen AI Market Position
- Strategic Partnership: Nvidia's collaboration with Marvell Technology aims to integrate Marvell's custom AI chips with Nvidia's AI computing ecosystem, which is expected to enhance Nvidia's market share in the custom AI chip sector, further solidifying its leadership in AI computing.
- Investment Strategy: Nvidia's $2 billion investment for a 2.5% stake in Marvell not only provides financial support for Marvell's future growth but also allows Nvidia to benefit from any potential Marvell deals, thereby increasing its competitiveness in the AI data center market.
- Technological Interconnectivity: By extending its NVLink technology to Marvell's custom processors, Nvidia is expected to improve product compatibility, attracting more enterprises to invest in AI data centers and expanding its total addressable market.
- Market Reaction: Following the announcement of the partnership, Nvidia's stock surged by 5.6%, indicating a positive market response to the collaboration, and despite a challenging overall market environment, this move could provide new momentum for Nvidia's future earnings growth.
See More
Truist Favors Cisco and Others Amid AI Spending Surge
- AI Investment Boost: Truist analyst Matthew Niknam highlights that U.S. hyperscaler capital expenditures are projected to reach approximately $700 billion by 2026, marking a nearly 60% year-over-year increase, which will directly drive demand for networking hardware from Cisco, Arista, and Motorola.
- Increased Spending on Traditional Servers: The shift from AI training to inference has led to increased spending in traditional servers and campus networking, enhancing market opportunities for these companies and potentially fostering long-term growth.
- Selective Investment Strategy: While maintaining a positive outlook on these stocks, Truist advises a more cautious investment approach due to some stocks nearing decade-high valuations and inflationary pressures that could impact future demand and volumes.
- Buy Ratings and Price Targets: Truist has assigned Buy ratings to Cisco, Arista, and Motorola, with price targets set at $94, $161, and $540 respectively, reflecting strong confidence in their growth prospects.
See More
