Arista Networks Inc ( ANET ) shares tanked in premarket trading on Friday, amid concerns around AI stocks trading at a premium.

Although ethernet could prevail in the AI era, the company is unlikely to be a big winner of this trend, according to Rosenblatt Securities.

The Arista Networks ( ANET ) Analyst: Mike Genovese downgraded the rating for Arista Networks ( ANET ) from Buy to Sell while slashing the price target from $330 to $210.

The Arista Networks Thesis: The stock is trading at a significant premium, as investors see the company as a "large AI beneficiary," Genovese said in the downgrade note.

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"Investors have been debating Infiniband vs. Ethernet and assume ANET will thrive if Ethernet does," the analyst wrote. "We believe Ethernet is a winning technology, but think most of the spoils will go to Nvidia Corp ( NVDA ) ," he added.

"While ANET will continue to compete with Cisco Systems Inc ( CSCO ) in Enterprise, the primary Data Center competitor is now Nvidia ( NVDA ), which has significant advantages over Arista," Genovese further wrote.

ANET Price Action: Shares of Arista Networks ( ANET ) had declined by 6.48% to $277.35 at the time of publication on Friday.

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