Oppenheimer analyst Ittai Kidron says Arista Networks' (ANET) legal risk is dissipating after the Patent and Trial Appeal Board yesterday issued a final decision invalidating all relevant claims of one of the Cisco (CSCO) patents involved in the ongoing Arista/Cisco litigation. This follows a May 25 PTAB decision invalidating a different Cisco patent. Taken together, these decisions are a positive for Arista, Kidron tells investors in a research note. He believes the invalidation of these patents eliminates the infringement and the need to develop workarounds. The analyst keeps an Outperform rating on Arista shares with a $160 price target.

Bullish option flow detected in Arista Networks with 2,900 calls trading, 1.7x expected, and implied vol increasing almost 2 points to 56.57%. Nov-24 270 calls and 4/26 weekly 275 calls are the most active options, with total volume in those strikes near 770 contracts. The Put/Call Ratio is 0.64. Earnings are expected on May 7th.