Wall Street Ends 2026 with 17% Return Rate in Tech Stocks

Written by Emily J. Thompson, Senior Investment Analyst

ANET-0.58%

INOD+6.82%

RXRX+0.65%

Source: Benzinga

Updated: Dec 26 2025

0mins

Source: Benzinga

Strong Performance in Tech Stocks: The S&P 500 is projected to finish 2026 with a 17% return rate, reflecting the robust earnings and market momentum of tech giants like Nvidia and Microsoft in 2025, further solidifying their positions in investors' minds.
Rise of Small AI Stocks: As concerns over valuations of large tech stocks grow, investors are turning their attention to small-cap AI companies with market caps under $50 billion, which have unique advantages in solving specific infrastructure issues and can achieve higher growth potential.
Surge in Capital Expenditures: Hyperscalers' capital expenditures reached $106 billion in Q3 2023, a 75% year-over-year increase, providing a foundation for high valuations in the tech sector, although future growth may slow, it is expected to remain elevated.
Market Risks and Opportunities: While small AI stocks offer “pure play” investment opportunities, they also come with high volatility, requiring investors to carefully assess potential risks, especially during market corrections when these stocks may experience significant value fluctuations.

ANET

$129.83+Infinity%1D

Analyst Views on ANET

Wall Street analysts forecast ANET stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ANET is 171.42 USD with a low forecast of 140.00 USD and a high forecast of 200.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

15 Analyst Rating

13 Buy

2 Hold

0 Sell

Strong Buy

Current: 130.590

Low

140.00

Averages

171.42

High

200.00

Current: 130.590

Low

140.00

Averages

171.42

High

200.00

Piper Sandler

Neutral

Overweight

upgrade

$145 -> $159

Al Analysis

2026-01-05

Reason

Piper Sandler

Price Target

$145 -> $159

Al Analysis

2026-01-05

upgrade

Neutral

Overweight

Reason

Piper Sandler upgraded Arista Networks (ANET) to Overweight from Neutral with a price target of $159, up from $145. With 2026 positioned as a "Year of Refresh," rising enterprise investment, hyperscaler and AI exposure, and a conservative setup at a reasonable valuation are improving model visibility, the analyst tells investors in a research note. Despite concerns around share shifts to whitebox and Nvidia (NVDA) and the broader capex/AI cycle, Arista appears to be holding share, gaining large enterprise customers, and benefiting from typically lagged capex trends, the firm says.

Piper Sandler

Neutral -> Overweight

upgrade

$145 -> $159

2026-01-04

Reason

Piper Sandler

Price Target

$145 -> $159

2026-01-04

upgrade

Neutral -> Overweight

Reason

Piper Sandler upgraded Arista Networks to Overweight from Neutral with a price target of $159, up from $145.

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Morgan Stanley

Overweight

downgrade

$171 -> $159

2025-12-17

Reason

Morgan Stanley

Price Target

$171 -> $159

2025-12-17

downgrade

Overweight

Reason

Morgan Stanley lowered the firm's price target on Arista Networks to $159 from $171 and keeps an Overweight rating on the shares. The AI trade broadened out from semi names in 2025, helping infrastructure names, particularly within optical, notes the analyst, who believes that trade can continue, particularly in optical, through the first half of 2026. However, investors will "need to get more selective for full year returns given multiples," the analyst added in a year-ahead note on the group.

Evercore ISI

Tactical Outperform -> Outperform

downgrade

$175

2025-12-11

Reason

Evercore ISI

Price Target

$175

2025-12-11

downgrade

Tactical Outperform -> Outperform

Reason

Evercore ISI is removing the firm's "Tactical Outperform" call on Arista Networks following the company's September-end quarter report last month, noting that the firm believes the negative stock reaction since the report is "a reflection of forward estimates not moving up in a material manner." However, the firm continues to believe that networking as a whole will see further outsized growth, with Arista well positioned to benefit, and keeps an Outperform rating and $175 price target on shares.

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.