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Arista Networks (ANET - Free Report) ended the recent trading session at $173.99, demonstrating a -1.48% change from the preceding day's closing price. This change lagged the S&P 500's daily gain of 0.05%. Elsewhere, the Dow gained 0.46%, while the tech-heavy Nasdaq lost 0.64%.

Shares of the cloud networking company witnessed a gain of 6.75% over the previous month, beating the performance of the Computer and Technology sector with its loss of 3.62%, and the S&P 500's gain of 0.61%.

The investment community will be closely monitoring the performance of Arista Networks in its forthcoming earnings report. The company is scheduled to release its earnings on August 4, 2026. The company is forecasted to report an EPS of $0.89, showcasing a 21.92% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $2.83 billion, up 28.5% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.64 per share and revenue of $11.59 billion. These totals would mark changes of +22.15% and +28.71%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Arista Networks. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.31% higher. Arista Networks is holding a Zacks Rank of #2 (Buy) right now.

In the context of valuation, Arista Networks is at present trading with a Forward P/E ratio of 48.5. Its industry sports an average Forward P/E of 18.34, so one might conclude that Arista Networks is trading at a premium comparatively.

It is also worth noting that ANET currently has a PEG ratio of 2.44. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.02.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 154, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Shares of Arista Networks (ANET +0.28%) charged sharply higher in the first half of 2026, gaining 29.6%, according to data supplied by S&P Global Market Intelligence. That's more than three times the roughly 10% gains of the S&P 500.

The network specialist released back-to-back strong quarterly reports, and strong adoption of artificial intelligence (AI) sent its stock to new all-time highs.

Image source: The Motley Fool.

Second verse, same as the first Arista Networks delivered its fourth-quarter report in early February, and the results were impressive. The company generated record quarterly revenue of $2.49 billion, which grew 29% year over year and 8% quarter over quarter. This drove adjusted earnings per share (EPS) of $0.82 up 24%. Furthermore, Airsta's strong operating margin -- at 47.5% -- helped the company surpass $1 billion in quarterly net income for the first time.

Management suggested its growth streak would continue, increasing its 2026 revenue outlook to $11.25 billion or 25% growth, fueled by an operating margin of 46%.

When Arista reported its first-quarter results just three months later, its growth accelerated. Record revenue of $2.7 billion climbed 35% year over year and 9% quarter over quarter, while adjusted EPS of $0.87 rose 32%. The company also delivered operating cash flow of $1.69 billion, the highest in its history. Arista said it expects its AI-related sales to more than double to $3.25 billion over the next year.

For the second time in as many quarters, management increased its full-year forecast, now guiding for revenue of $11.5 billion or 28% growth, with its operating margin potentially inching higher at 46% to 47%.

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During the Q1 earnings call, CEO Jayshree Ullal said that, in addition to two existing customers that generate 10% or more of revenue -- Microsoft and Meta Platforms -- Arista expects to add "at least one, maybe two" new 10% plus customers before the year is over. That suggests significant upside to the company's already rapid growth.

Arista has an almost unanimous blessing from Wall Street, as 97% of the analysts who cover the stock rate it a buy or strong buy, and none recommend selling. Furthermore, the average price target of $192 implies additional upside of 10%.

Moreover, Arista is a leader in the field of networking, but don't take my word for it. The company has made frequent appearances in Gartner's vaunted Magic Quadrant for data center switching, enterprise wired and wireless local area networks (LAN), and software-defined wide area networks (SD-WAN).

Given the company's crucial role in the data center industry, its continuing history of innovation, and its accelerating growth, I believe Arista Networks is an unqualified buy.

Danny Vena, CPA has positions in Arista Networks, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Arista Networks, Meta Platforms, and Microsoft. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.

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Stock to Watch: Arista Networks (ANET - Free Report) Santa Clara, CA-based Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computingenvironments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks. Arista uses multiple silicon architectures across its products. At the core of the company’s cloud networking solutions is the Linux-based Extensible Operating System (EOS), which was architected to be fully programmable and highly modular.

ANET is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. ANET has a Growth Style Score of A, forecasting year-over-year earnings growth of 22.2% for the current fiscal year.

For fiscal 2026, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.03 to $3.64 per share. ANET boasts an average earnings surprise of +8.3%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, ANET should be on investors' short list.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Arista Networks (NYSE: ANET), a leader in networking for cloud and artificial intelligence (AI) fabrics, today announced the launch of its new AI-driven Edge Threat Management (ETM) for VeloCloud SD-WAN, delivering integrated zero trust security for enterprise branch offices. Customers can leverage this integration to simplify the branch, collapsing multiple disparate boxes into a single unified secure SD-WAN edge platform. Integrated ETM provides perimeter.

Software stocks are heading into this earnings season from a position of strength. Businesses continue to invest heavily in digital transformation, while artificial intelligence (AI) is shifting from an experimental technology to a core business tool. Companies are increasingly seeing tangible benefits from generative AI and the emerging wave of agentic AI. At the same time, software-as-a-service (SaaS), cloud computing, hybrid work and digital payment solutions remain powerful long-term growth drivers.

This favorable backdrop suggests that software companies with strong execution and AI exposure could once again outperform analysts’ expectations. Against this setting, Unity Software (U - Free Report) , HubSpot (HUBS - Free Report) , Arista Networks (ANET - Free Report) and Block (XYZ - Free Report) stand out as companies with the potential to deliver earnings beats.

What’s Going in Favor of Software Stocks?The current earnings season is expected to highlight the continued strength of AI-driven software spending. Businesses are increasingly adopting solutions such as voice recognition, telehealth platforms, learning management systems, infrastructure monitoring software and spend management tools. Collaboration platforms, communication software and online education services are also seeing steady demand as workplaces and learning environments continue to evolve.

Cloud adoption remains one of the industry's biggest growth engines. The rapid expansion of IoT devices, augmented and virtual reality applications, and the rollout of 5G networks are creating greater demand for cloud-based software. At the same time, businesses continue investing in collaboration platforms, remote desktop solutions, natural language processing tools and productivity software, supporting healthy industry-wide growth.

Cybersecurity is another major tailwind. As cyberattacks become more frequent and sophisticated, companies are allocating larger budgets toward cloud-native security solutions. Businesses are also replacing traditional hardware-heavy infrastructure with software-defined systems that offer greater flexibility, scalability and lower operating costs.

Another positive trend is the industry's shift toward customer-centric software platforms. Modern software solutions require less manual support from vendors while giving customers greater control over their operations. Flexible pay-as-you-go pricing allows companies to scale usage as needed, while subscription-based business models generate predictable recurring revenues for software providers. SaaS platforms also remain affordable for small and medium-sized businesses, expanding the industry's addressable market.

How to Identify Potential Outperformers?With the presence of several industry participants, finding the right software stocks with the potential to beat on earnings can be daunting. However, our proprietary methodology makes this task simple.

You could narrow down your choices by looking at stocks that have the perfect combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP is our proprietary methodology for determining stocks that have the maximum chances of beating estimates in their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Our research shows that for stocks with this favorable mix of ingredients, the odds of a positive earnings surprise are as high as 70%.

Top PicksUnity Software will report second-quarter 2026 results on Aug. 6. The company sports a Zacks Rank #1 and has an Earnings ESP of +2.74%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $510.9 million, which calls for a year-over-year increase of 15.9%. The consensus mark for earnings stands at 24 cents per share, indicating a robust improvement from the year-ago quarter’s loss per share of 26 cents.

Unity's turnaround story is gaining credibility. The company has been reshaping its business by exiting lower-quality operations and focusing on higher-margin, recurring revenue opportunities. Although these portfolio changes have created short-term revenue fluctuations, they are improving the overall quality and sustainability of the business.

Management is placing greater emphasis on scalable advertising technology, creator subscriptions and monetization services, all of which should support stronger long-term recurring revenues. This strategy also strengthens Unity's competitive position against companies like AppLovin by combining advanced advertising technology with its leading game development platform.

The company's product ecosystem continues to create new monetization opportunities for developers. The Create segment is benefiting from healthy subscription demand and increasing usage-based revenues. Another important catalyst is Unity AI, which entered public beta in May 2026. By helping developers automate coding, asset creation and other development tasks, the platform has the potential to significantly improve productivity and strengthen customer engagement over time.

HubSpot is expected to report second-quarter 2026 results on Aug. 5. The company currently has an Earnings ESP of +0.15% and a Zacks Rank #1. The Zacks Consensus Estimate for revenues of $897.8 million indicates year-over-year growth of 18%. The consensus mark for the bottom line is pegged at $3.02 per share, suggesting a robust year-over-year jump of 37.9%.

HubSpot continues to strengthen its competitive position by embedding AI across its entire customer platform. Features such as AI assistants, AI agents, AI insights and ChatSpot are helping customers automate marketing, sales and customer relationship management tasks without paying additional fees. This broad AI integration enhances the value of the platform and improves customer retention.

The company's shift to a seat-based pricing model is another important growth driver. The new pricing structure makes it easier for customers to adopt HubSpot's services while reducing pricing friction when businesses expand usage. Over time, this should create healthier customer relationships and support stronger recurring revenue growth.

HubSpot is also integrating generative AI deeper into its CRM, marketing and sales automation tools. Meanwhile, its App Marketplace continues to make it easier for customers to connect third-party applications, making the platform more valuable and increasing switching costs for users.

Arista Networks is slated to report second-quarter 2026 results on Aug. 4. The company carries a Zacks Rank #2 and has an Earnings ESP of +0.84%. The Zacks Consensus Estimate for second-quarter revenues is pegged at $2.83 billion, which calls for a year-over-year increase of 28.5%. The consensus mark for earnings stands at 89 cents per share, indicating a year-over-year rise of 21.9%.

Arista remains one of the strongest networking companies benefiting from the AI infrastructure boom. Its broad portfolio of high-performance Ethernet switches and routers is well-positioned for modern data centers that require high capacity, low latency and superior power efficiency.

The company continues to lead in high-speed networking solutions, particularly in 100-gigabit Ethernet switches, while steadily expanding its presence in 200G and 400G products. As AI and machine learning workloads become more demanding, enterprises and hyperscale cloud providers are increasingly relying on Arista's networking solutions.

Its Arista 2.0 strategy is also delivering results. Customers are adopting its unified networking platform as they modernize data centers and transition toward cloud-native infrastructure. Continuous expansion of CloudEOS Edge and the broader software portfolio further strengthens Arista's position across data center, campus networking and wide-area networking markets, supporting healthy long-term revenue growth.

Block is scheduled to report second-quarter 2026 results on Aug. 5. The company currently carries a Zacks Rank #2 and has an Earnings ESP of +0.23%. The Zacks Consensus Estimate for second-quarter revenues is pegged at $6.54 billion, which calls for a year-over-year increase of 8%. The consensus mark for earnings stands at 86 cents per share, indicating a rise of 38.7% from the year-ago quarter’s earnings of 62 cents.

Block continues to build a powerful financial ecosystem serving both merchants and consumers. Its integrated platform enables businesses to manage payments, financial services and marketing from a single provider, creating a competitive advantage and increasing customer loyalty.

The combination of Square and Cash App allows Block to participate in multiple stages of the payment ecosystem rather than depending solely on transaction volumes. By increasing user engagement and monetization across both platforms, the company is creating additional revenue opportunities while strengthening its competitive position.

Block is also expanding through technology innovation and strategic partnerships. Collaborations with companies such as Birch Coffee, GOLFTEC and Steak Escape demonstrate the growing adoption of its commerce platform across multiple industries. As more businesses join its ecosystem, Block appears well-positioned to sustain healthy growth and potentially outperform earnings expectations.

Posted by Defense World Staff on Jul 21st, 2026

Andra AP fonden boosted its position in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) by 22.5% during the 1st quarter, according to its most recent 13F filing with the SEC. The fund owned 250,000 shares of the technology company’s stock after purchasing an additional 46,000 shares during the quarter. Andra AP fonden’s holdings in Arista Networks were worth $30,695,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds have also bought and sold shares of the company. Intrua Financial LLC lifted its stake in shares of Arista Networks by 2.7% in the first quarter. Intrua Financial LLC now owns 2,307 shares of the technology company’s stock worth $283,000 after buying an additional 61 shares in the last quarter. NBT Bank N A NY increased its position in shares of Arista Networks by 37.2% during the first quarter. NBT Bank N A NY now owns 247 shares of the technology company’s stock valued at $30,000 after acquiring an additional 67 shares in the last quarter. Hoxton Planning & Management LLC raised its holdings in Arista Networks by 4.1% in the 1st quarter. Hoxton Planning & Management LLC now owns 1,744 shares of the technology company’s stock worth $214,000 after acquiring an additional 68 shares during the last quarter. Whittier Trust Co. of Nevada Inc. lifted its position in Arista Networks by 0.4% in the 4th quarter. Whittier Trust Co. of Nevada Inc. now owns 16,085 shares of the technology company’s stock valued at $2,133,000 after acquiring an additional 70 shares in the last quarter. Finally, Y.D. More Investments Ltd lifted its position in Arista Networks by 8.7% in the 1st quarter. Y.D. More Investments Ltd now owns 870 shares of the technology company’s stock valued at $107,000 after acquiring an additional 70 shares in the last quarter. 82.47% of the stock is currently owned by institutional investors.

Insider Transactions at Arista Networks In related news, CEO Jayshree Ullal sold 234,578 shares of the business’s stock in a transaction dated Friday, July 10th. The stock was sold at an average price of $187.18, for a total value of $43,908,310.04. Following the sale, the chief executive officer directly owned 5,134,207 shares in the company, valued at approximately $961,020,866.26. The trade was a 4.37% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 240,000 shares of the stock in a transaction that occurred on Thursday, July 2nd. The shares were sold at an average price of $162.67, for a total value of $39,040,800.00. Following the transaction, the insider directly owned 182,043,048 shares of the company’s stock, valued at approximately $29,612,942,618.16. The trade was a 0.13% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 2,692,983 shares of company stock valued at $452,119,385. 2.70% of the stock is owned by company insiders.

Arista Networks Stock Performance Shares of NYSE:ANET opened at $169.17 on Tuesday. The firm has a market cap of $213.02 billion, a price-to-earnings ratio of 57.94, a P/E/G ratio of 2.59 and a beta of 1.60. The firm has a fifty day moving average price of $162.41 and a 200 day moving average price of $147.60. Arista Networks, Inc. has a fifty-two week low of $106.99 and a fifty-two week high of $189.82.

Arista Networks (NYSE:ANET – Get Free Report) last announced its quarterly earnings results on Tuesday, May 5th. The technology company reported $0.87 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.81 by $0.06. The company had revenue of $2.71 billion for the quarter, compared to the consensus estimate of $2.62 billion. Arista Networks had a net margin of 38.32% and a return on equity of 30.10%. Arista Networks’s revenue for the quarter was up 35.1% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.65 EPS. Arista Networks has set its Q2 2026 guidance at 0.880-0.880 EPS. As a group, research analysts predict that Arista Networks, Inc. will post 3.28 earnings per share for the current year.

Analyst Ratings Changes ANET has been the subject of several recent analyst reports. Wolfe Research restated an “outperform” rating and issued a $175.00 price target on shares of Arista Networks in a research note on Wednesday, June 10th. Citigroup reduced their price objective on Arista Networks from $176.00 to $173.00 and set a “buy” rating for the company in a report on Wednesday, May 6th. Truist Financial set a $175.00 target price on shares of Arista Networks in a research note on Wednesday, May 6th. Barclays reaffirmed an “overweight” rating and set a $195.00 price target (up from $184.00) on shares of Arista Networks in a report on Thursday, May 7th. Finally, UBS Group reaffirmed a “buy” rating and issued a $187.00 target price (up from $177.00) on shares of Arista Networks in a research report on Wednesday, May 6th. Two analysts have rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and one has given a Hold rating to the company. Based on data from MarketBeat, the stock has a consensus rating of “Buy” and an average target price of $188.95.

Check Out Our Latest Research Report on ANET

Arista Networks Profile (Free Report)

Arista Networks, Inc is a technology company that designs and sells cloud networking solutions for large-scale data centers and enterprise environments. The company is best known for its high-performance switching and routing platforms, which are used to build scalable, low-latency networks for cloud service providers, internet companies, financial services, telecommunications, and enterprise IT. Arista’s offerings emphasize programmability, automation and telemetry to support modern, software-driven network architectures.

Central to Arista’s product portfolio is its Extensible Operating System (EOS), a modular network operating system that provides consistent programmability, stateful control and advanced visibility across the company’s hardware platforms.

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On July 20, 2026, we present a detailed DCF analysis for Arista Networks Inc (ANET), a company that has shown significant price performance over the last year,

Posted by Defense World Staff on Jul 20th, 2026

D.A. Davidson & CO. boosted its position in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) by 18.6% in the first quarter, according to its most recent filing with the Securities & Exchange Commission. The fund owned 28,473 shares of the technology company’s stock after buying an additional 4,465 shares during the quarter. D.A. Davidson & CO.’s holdings in Arista Networks were worth $3,496,000 as of its most recent filing with the Securities & Exchange Commission.

A number of other large investors have also added to or reduced their stakes in ANET. Sankala Group LLC bought a new stake in shares of Arista Networks in the fourth quarter worth about $27,000. Prosperity Bancshares Inc bought a new stake in shares of Arista Networks in the 4th quarter worth approximately $28,000. Ameliora Wealth Management Ltd. purchased a new position in shares of Arista Networks during the fourth quarter valued at approximately $30,000. Hilton Head Capital Partners LLC raised its holdings in shares of Arista Networks by 184.9% during the first quarter. Hilton Head Capital Partners LLC now owns 245 shares of the technology company’s stock valued at $30,000 after acquiring an additional 159 shares in the last quarter. Finally, NBT Bank N A NY lifted its stake in Arista Networks by 37.2% in the first quarter. NBT Bank N A NY now owns 247 shares of the technology company’s stock worth $30,000 after acquiring an additional 67 shares during the period. Institutional investors own 82.47% of the company’s stock.

Insider Activity at Arista Networks In other Arista Networks news, CEO Jayshree Ullal sold 428,000 shares of the stock in a transaction on Wednesday, April 22nd. The stock was sold at an average price of $177.44, for a total transaction of $75,944,320.00. Following the sale, the chief executive officer directly owned 5,209,207 shares in the company, valued at approximately $924,321,690.08. This trade represents a 7.59% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 260,000 shares of Arista Networks stock in a transaction on Monday, June 15th. The stock was sold at an average price of $165.57, for a total value of $43,048,200.00. Following the completion of the sale, the insider directly owned 182,543,048 shares of the company’s stock, valued at approximately $30,223,652,457.36. The trade was a 0.14% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 2,786,844 shares of company stock worth $467,941,533 over the last ninety days. 2.70% of the stock is currently owned by insiders.

Analysts Set New Price Targets Several equities research analysts have recently commented on the stock. Wells Fargo & Company reaffirmed an “overweight” rating and issued a $200.00 target price (up from $185.00) on shares of Arista Networks in a research report on Thursday. JPMorgan Chase & Co. lifted their price target on Arista Networks from $190.00 to $200.00 and gave the company an “overweight” rating in a research report on Thursday, April 16th. TD Cowen reissued a “buy” rating and set a $210.00 price objective (up from $200.00) on shares of Arista Networks in a research report on Monday, July 13th. Susquehanna raised shares of Arista Networks to a “strong-buy” rating in a research note on Wednesday, April 1st. Finally, Zacks Research cut Arista Networks from a “strong-buy” rating to a “hold” rating in a research report on Thursday, May 14th. Two investment analysts have rated the stock with a Strong Buy rating, twenty-two have assigned a Buy rating and one has issued a Hold rating to the company. Based on data from MarketBeat, Arista Networks has an average rating of “Buy” and an average target price of $188.95.

Get Our Latest Analysis on Arista Networks

Arista Networks Stock Performance Shares of Arista Networks stock opened at $168.60 on Monday. The stock has a market capitalization of $212.30 billion, a PE ratio of 57.74, a price-to-earnings-growth ratio of 2.59 and a beta of 1.60. Arista Networks, Inc. has a 52-week low of $106.99 and a 52-week high of $189.82. The company has a 50-day simple moving average of $161.75 and a two-hundred day simple moving average of $147.34.

Arista Networks (NYSE:ANET – Get Free Report) last posted its quarterly earnings results on Tuesday, May 5th. The technology company reported $0.87 EPS for the quarter, beating analysts’ consensus estimates of $0.81 by $0.06. The firm had revenue of $2.71 billion for the quarter, compared to analysts’ expectations of $2.62 billion. Arista Networks had a net margin of 38.32% and a return on equity of 30.10%. The business’s revenue for the quarter was up 35.1% on a year-over-year basis. During the same quarter in the prior year, the company posted $0.65 earnings per share. Arista Networks has set its Q2 2026 guidance at 0.880-0.880 EPS. As a group, equities research analysts forecast that Arista Networks, Inc. will post 3.28 EPS for the current fiscal year.

Arista Networks Profile (Free Report)

Arista Networks, Inc is a technology company that designs and sells cloud networking solutions for large-scale data centers and enterprise environments. The company is best known for its high-performance switching and routing platforms, which are used to build scalable, low-latency networks for cloud service providers, internet companies, financial services, telecommunications, and enterprise IT. Arista’s offerings emphasize programmability, automation and telemetry to support modern, software-driven network architectures.

Central to Arista’s product portfolio is its Extensible Operating System (EOS), a modular network operating system that provides consistent programmability, stateful control and advanced visibility across the company’s hardware platforms.

See Also Five stocks we like better than Arista Networks Strait of Hormuz Tensions Spike Tanker Trade: These 2 Stocks Are Set to Benefit Shopify’s Quiet AI Strategy Could Be Its Biggest Advantage Yet Why These 3 Nuclear ETFs Are Getting a Fresh Look as AI Power Demand Rises 3 Aerospace Suppliers That Could Benefit as Aircraft Makers Face Bottlenecks Want to see what other hedge funds are holding ANET? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Arista Networks, Inc. (NYSE:ANET – Free Report).

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Arista Networks (ANET), Seagate Technology and Astera Labs emerged as BNP Paribas' top AI supply-chain ideas as the bank stayed bullish on compute, networking a

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Your feed is full of Arista Networks screenshots. Green candles, giddy captions, someone’s cousin bragging about a 40% run. Arista Networks (NYSE:ANET | ANET Price Prediction) has become the poster child for the AI networking trade, and if you didn’t buy it, the FOMO is real.

Here’s the part nobody’s screenshotting: the Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) is up plenty over the same stretch. You didn’t need to pick the winner. You just needed exposure to the theme that made winners.

The Window and the Numbers From December 31, 2025 through July 10, 2026, Arista is up 42.68% on a price basis, climbing from $131.03 to $186.96. Over that identical window, AIQ returned 24.74%, moving from $50.86 to $63.44.

A quarter added to your money in a little over six months is the kind of return that makes financial planners smile. If you had put a chunk into AIQ on New Year’s Day and never checked the ticker, you would have participated in the same rising tide that lifted Arista, just spread across a basket of names.

What’s Actually Driving This The Arista story is the AI data center story. Q1 2026 revenue hit $2.71 billion, up 35.1% year over year, with product revenue jumping to $2.31 billion from $1.69 billion on AI networking demand. Non-GAAP EPS of $0.87 beat estimates of $0.81, marking a fourth straight EPS beat. CEO Jayshree Ullal framed it plainly: “We are uniquely positioned to deliver the mission-critical confluence of secure client-to-campus-to-cloud and AI networking.”

[anet_price_scenario]

Hyperscalers are wiring out AI clusters at a pace that has bent the entire compute supply chain. Switches, optics, accelerators, memory, foundry capacity, cloud platforms. Arista sits in one lane of that buildout. AIQ owns a broad slice of the whole road: a diversified basket of AI and technology names spanning U.S. and Asian markets, with $6.97 billion in net assets as of April 3, 2026. The theme is the driver. The stock is one expression of it.

The Trade-Off You Skipped Yes, Arista holders made more. 42.68% beats 24.74%. Nobody is arguing otherwise.

They also took on single-stock risk. Ask the folks who piled into Super Micro Computer during its 2024 AI ascent, then watched auditor resignations and delayed filings gut the stock within months. Same theme, same tailwind, wildly different outcome. Arista also carries a rich valuation: a trailing P/E near 62 and a forward P/E around 46 leaves little room for a stumble. Insider activity has skewed toward selling across 205 recent transactions, which is worth noting even if the analyst desk stays firmly bullish with 30 buy or strong-buy ratings and zero holds or sells.

[anet_analyst_ratings]

AIQ spreads that concentration risk across a global basket of AI-linked names, with its top 10 positions capped in the mid single digits each and no single holding above 4.5%. It charges a 0.68% expense ratio. You gave up the top of the trade to skip the bottom of it.

Process Over Prediction Chasing hot tickers is stock-picking with extra regret. If you nail it, you’re a genius on the group chat. If you don’t, you’re refreshing an earnings page at 4:05 p.m. wondering whether guidance just wrecked the thesis you barely understood.

Owning the theme is a different game. You accept that some names in the basket will outrun the index, some will lag, and a few will blow up. The bet is on the direction of the whole thing: that AI infrastructure spending keeps flowing, that networking, semis, cloud, and software all draft off the same wave. Analysts project AI-related revenue growth at roughly a 35% CAGR through 2029, and Arista’s Q2 guide of around $2.80 billion in revenue suggests the buildout isn’t slowing this quarter.

You didn’t buy Arista. Fine. The trade was AI networking, and there was more than one door into that room.

Contact [email protected] for any questions or corrections.

Key Takeaways WDAY appears the better pick, backed by a far lower forward price-to-sales valuation than ANET.Arista's sales and EPS are projected to grow 28.5% and 21.8%, outpacing Workday's estimates.Workday's EPS estimate rose 1.7% in 60 days, while Arista's stayed flat despite stronger stock gains. Workday, Inc. (WDAY - Free Report) and Arista Networks, Inc. (ANET - Free Report) are leading players in the enterprise software and cloud solutions for large organizations, benefiting from the enterprise AI spending cycle. Workday specializes in cloud-based human capital management (HCM) and financial management software. The company’s cloud-based platform with embedded AI integrates finance and HR into a single system, making it easier for organizations to provide analytical insights and decision support.

Arista offers one of the broadest product lines of data center and campus Ethernet switches and routers in the industry, primarily focusing on high-performance cloud and data center networking infrastructure powering AI and hyperscale computing. It provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency.

Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.

The Case for WDAYWorkday is expanding its portfolio beyond core HCM solutions into the financial domain. It is customizing its solutions for diverse industries and verticals, including education, public services and financial services. This has helped the company achieve strong renewals and expand its customer base, as businesses aim to consolidate spend and improve efficiency. The growing clout of Workday Prism Analytics and Adaptive Insights business planning cloud offerings holds promise. Workday’s diversified product portfolio continues to yield a steady flow of customers. The partnership with Alight to deliver an integrated payroll experience to customers across several European regions has expanded its global footprint. The company’s collaboration with the AWS marketplace has also led to multiple customer wins.

Management is putting a strong focus on integrating advanced AI and ML capabilities. The ongoing AI-powered product development emphasizes natural language generation, content search, summarization, content augmentation and document understanding. Workday is focusing on deeply embedding AI within enterprise workflows to improve decision-making, automation and productivity. The company has been aggressively integrating AI across its enterprise cloud platform, especially in HR, finance, workforce planning and automation. It has recently introduced Workday Illuminate, which integrates generative AI into enterprise workflows for AI-powered workforce insights.

However, despite efforts to broaden its market presence, Workday continues to derive 75% of its revenue from the United States. The lack of geographical diversity exposes the company to various market risks. Economic downturns, shifts in consumer preferences and changes in the regulatory environment often adversely impact Workday’s revenues and profitability. Stiff competition in the HCM and financial management software market from established players like Oracle Corporation (ORCL - Free Report) has led to pricing pressure. In addition, the company’s margin continues to be affected by higher operating and SG&A expenses, primarily due to an increase in headcount and marketing spending.

The Case for ANETArista offers one of the broadest product lines of data center and campus Ethernet switches and routers in the industry, with industry-leading capacity, low latency, port density and power efficiency. It holds a leadership position in 100-gigabit Ethernet switches for the high-speed data center segment and is increasingly gaining market traction in 200 and 400-gigabit switching products. Over the years, the company has introduced various products to meet the rising demands of AI/ML-driven network architectures. These innovations have enabled Arista to deliver a superior customer experience and increase customer engagement.

The Arista 2.0 strategy is resonating well with customers, as its modern networking platforms are foundational for the transformation from silos to data centers. Arista boasts a comprehensive portfolio with the right network architecture for client-to-campus data center cloud and AI networking, backed by three guiding principles. These include best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms.

With customers deploying transformative cloud networking solutions, the company has announced several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. It has introduced cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services. The versatility of Arista’s unified software stack across various use cases, including WAN routing and campus and data center infrastructure, has helped it to record steady top-line growth.

However, Arista remains plagued by high operating costs. As it continues to enhance its existing product line and develop new technologies and products that address emerging technological trends, evolving industry standards and changing end-customer needs, operating costs tend to soar. Moreover, the redesigning of products and their supply chain mechanism has eroded margins. Although the company is witnessing increased demand, there are lingering supply bottlenecks for advanced products. As such, when Arista increases orders for these components and tries to build up inventory, it is blocking working capital.

How Do Zacks Estimates Compare for WDAY & ANET?The Zacks Consensus Estimate for Workday’s fiscal 2027 sales and EPS implies year-over-year growth of 11.6% and 16.5%, respectively. The EPS estimates have trended up 1.7% over the past 60 days.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Arista’s 2026 sales and EPS indicates year-over-year growth of 28.5% and 21.8%, respectively. The EPS estimates have been flat over the past 60 days.

Image Source: Zacks Investment Research

Price Performance & Valuation of WDAY & ANETOver the past year, Workday has plunged 38.1% compared with the industry’s decline of 11.5%. Arista has gained 72.6% over the same period.

Image Source: Zacks Investment Research

Workday looks more attractive than Arista from a valuation standpoint. Going by the price/sales ratio, Arista’s shares currently trade at 18.25 forward sales, higher than Workday’s 3.07.

Image Source: Zacks Investment Research

WDAY or ANET: Which is a Better Pick?Both Workday and Arista carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Both companies expect their sales and profits to improve in the current fiscal. Arista has better price performance, although it is a bit expensive in terms of valuation compared with Workday.  Investors looking for faster revenue growth and an expanding SAAS market may lean toward Workday, while those seeking a broad, resilient tech play may favor Arista. Although there is not much to choose from in terms of Zacks Rank, Workday holds a competitive edge in terms of valuation metrics and appears to be a better investment option at the moment.

Arista Networks is well-positioned for Q2 earnings, with optimism driven by strong demand for its AI connectivity and Ethernet switching solutions. Recent management commentary and supply chain updates suggest CY26 gross margins may bottom at 62-64%, with potential for upward guidance revision. I am reiterating my Bullish rating on ANET and raising my price target to $209, reflecting anticipated EBITDA multiple expansion and accelerating growth.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of ANET either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Arista Networks, Inc. (NYSE: ANET) will release its financial results for the quarter ended June 30th, 2026, after U.S. markets close on Tuesday, August 4th, 2026. The results will be included in a press release, along with accompanying financial information, and will be posted on the Investor Relations section of the Arista website at https://investors.arista.com. Arista's executive management team will host a conference call on August 4th, beginning at 1:.

There are plenty of artificial intelligence (AI) stocks grabbing investors' attention these days, and many of them are semiconductor designers and manufacturers. But while the AI data center boom is driving many chip stocks higher, there are other ways to play the artificial intelligence supercycle.

Arista Networks (ANET 3.78%) is a prime example. The company's networking equipment and software help the biggest tech companies run their AI data centers -- and it could benefit from infrastructure spending for years to come.

Image source: Getty Images.

Why Arista stands out in the AI crowd Arista Networks sells data center networking hardware and software that enables tech companies to manage their data center systems. That's become a very good business to be in, considering that the largest technology players are spending an estimated $750 billion on AI infrastructure this year alone.

While Arista has most of its business tied to a handful of large companies -- including Microsoft and Meta -- it's somewhat protected from this concentration. Once a company begins using Arista's hardware and software, it becomes difficult to switch. AI data center systems are complex and costly, and hardware and software upgrades are expensive.

What's more, most of its customers don't want to switch, with independent data showing that 94% of them are strongly positive about Arista.

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Arista is in great financial shape Arista reported its first-quarter 2026 results in May, and investors were initially disappointed by the management's gross margin guidance of between 62% to 64% for 2026. Arista's gross margins for 2025 were 64.1%, but investors were hoping they would expand further.

The slight margin decline comes as memory prices have skyrocketed over the past few years due to a supply shortage driven by AI data centers. Arista uses memory in its hardware systems, so it's feeling the pricing pressure too. It's worth noting that this isn't an Arista-specific issue. Apple just raised prices on many of its devices due to rising memory costs.

The bigger picture -- and what potential investors should focus on -- is how Arista is benefiting from surging AI data center demand. The company's sales jumped 35% to $2.7 billion in the first quarter, and non-GAAP (generally accepted accounting principles) earnings per share rose nearly 32% to $0.87.

What's more, Arista has no debt, it generated $1.64 billion in free cash flow in the first quarter, and management expects sales to rise 28% in 2026 to $11.5 billion.

In short, Arista is in great financial shape and continues to benefit from a rapidly expanding AI market.

If there's one concern for potential buyers of Arista Networks, it's that its stock currently has a trailing price-to-earnings (P/E) ratio of 56, above the tech sector average of about 41.

But with strong sales and earnings growth, high gross margins, and strong free cash flow, there's little to worry about with Arista.

Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Apple, Arista Networks, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

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Stock Market Skids As Trump Makes This Trade Call; Jobs Report Due Big Cap 20 component Arista Networks (ANET) is still forming a long handle, as shares trade just below a proper buy point. Arista stock is also part of the No. 9-ranked computer networking industry group, which indicates leadership. Shares of the cloud networking products manufacturer traded close to a 177.48 proper entry from a cup-with-handle base on a daily chart…

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Arista Networks (ANET - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this cloud networking company have returned -1.2%, compared to the Zacks S&P 500 composite's -2.9% change. During this period, the Zacks Internet - Software industry, which Arista Networks falls in, has lost 5.2%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Arista Networks is expected to post earnings of $0.89 per share, indicating a change of +21.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The consensus earnings estimate of $3.63 for the current fiscal year indicates a year-over-year change of +21.8%. This estimate has remained unchanged over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $4.39 indicates a change of +20.8% from what Arista Networks is expected to report a year ago. Over the past month, the estimate has changed +0.1%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Arista Networks is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Arista Networks, the consensus sales estimate of $2.82 billion for the current quarter points to a year-over-year change of +28%. The $11.58 billion and $13.97 billion estimates for the current and next fiscal years indicate changes of +28.6% and +20.6%, respectively.

Last Reported Results and Surprise HistoryArista Networks reported revenues of $2.71 billion in the last reported quarter, representing a year-over-year change of +35.1%. EPS of $0.87 for the same period compares with $0.65 a year ago.

Compared to the Zacks Consensus Estimate of $2.62 billion, the reported revenues represent a surprise of +3.48%. The EPS surprise was +7.41%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Arista Networks is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Arista Networks. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Key Takeaways CIEN raised fiscal 2026 revenue guidance, supported by AI infrastructure and optical networking demand.CIEN saw strong growth in service provider revenue and expanding hyperscaler engagements.ANET lifted its 2026 revenue outlook but faces supply constraints and gross margin pressure. Ciena Corporation (CIEN - Free Report) and Arista Networks, Inc. (ANET - Free Report) are among the key beneficiaries of the growing investments in artificial intelligence (AI) infrastructure, as organizations increasingly require advanced networking solutions to support large-scale AI workloads. The rapid expansion of AI training, inference and data-intensive applications is driving demand for high-performance connectivity across data centers, cloud environments and wide-area networks. As a result, networking providers are seeing rising opportunities to deliver the infrastructure needed to move, manage and process massive amounts of data efficiently.

Both companies are capitalizing on these favorable industry trends through their respective technology portfolios. Arista Networks is strengthening its position in AI and cloud networking with its high-speed Ethernet switching and AI fabric solutions, while Ciena is benefiting from growing demand for optical networking, interconnect technologies and data center connectivity infrastructure. With AI-related investments continuing to accelerate across hyperscalers, cloud providers and enterprises, both companies are well-positioned to participate in the long-term growth of the AI networking market.

Let’s analyze their fundamentals, growth opportunities, market challenges and valuation to assess which one presents a stronger investment opportunity.

The Case for CIENCiena is benefiting from AI-driven demand across cloud and service provider markets, supported by its technology leadership, deep customer relationships and broad portfolio spanning systems, interconnects, software and services. In the second quarter, revenue increased, adjusted gross margin expanded and adjusted earnings per share nearly quadrupled. Management stated that a strong and growing backlog, combined with the company's leading technology portfolio, provides strong visibility and positions Ciena to capture long-term opportunities across WAN and data center networking.

The company is also gaining momentum from rising investments by hyperscalers and service providers in network infrastructure. Management noted that customers are prioritizing high-capacity, low-latency and high-speed connectivity to support AI model training, data ingestion and inference workloads. Ciena's addressable market is expected to nearly double to approximately $50 billion by 2029, driven by growth in both traditional WAN markets and high-growth data center opportunities. Service provider revenue increased 28% year over year, while revenue from service providers in India more than doubled, reflecting strong demand for managed optical fiber network deployments.

Ciena continues to benefit from demand for its latest networking solutions and expanding customer engagements. The company announced the industry's first multi-rail order for its RLS Hyper-Rail platform from a leading hyperscaler and is engaged in discussions with multiple additional hyperscalers, neoscalers and service providers. Its DCOM solution contributed to 88% year-over-year growth in the Routing and Switching segment, while initial orders from a second hyperscaler and lab qualifications with a third customer further broadened the customer base. The company also secured a new hyperscaler win for its coherent modules and remains on track to more than double pluggable revenue compared with 2025.

Ciena is further benefiting from customer co-creation initiatives and strong operational execution. Management stated that customers increasingly involve the company early in the development of new architectures, helping improve road map decisions, increase win rates and provide greater demand visibility.

Image Source: Zacks Investment Research

Management expects third-quarter fiscal 2026 revenue of $1.625 billion, plus or minus $50 million. The company also increased its fiscal 2026 revenue guidance to $6.3 billion, plus or minus $100 million, which implies roughly 32% year-over-year growth at the midpoint. Management attributed the stronger outlook to ongoing investments in AI infrastructure and continued robust demand for its optical networking solutions.

However, Ciena continues to operate in a supply-constrained environment where demand exceeds available supply. As a result, the company is making additional capital and operating expense investments to secure future manufacturing capacity and strengthen supply-chain resilience. Management also cited ongoing constraints in modem components and laser pumps used in amplifiers and line systems. In addition, inflationary pressures and higher variable compensation associated with stronger business performance are increasing operating expenses, prompting further investments to support anticipated future demand.

The Case for ANETArista is gaining from the rapid expansion of AI infrastructure and cloud networking demand, as enterprises, hyperscalers and AI providers increasingly deploy large-scale training and inference workloads. The company delivered strong first-quarter 2026 results, with revenue rising 35.1% year over year to $2.71 billion, exceeding guidance. Management highlighted growing traction for its cloud and AI networking strategy, supported by increasing adoption of its high-speed Ethernet solutions and leadership position in high-speed switching. Reflecting this momentum, Arista raised its 2026 revenue outlook to approximately $11.5 billion and increased its AI fabrics revenue target to $3.5 billion, indicating expectations for continued growth in AI-related deployments.

The company continues to benefit from expanding AI networking opportunities through its scale-out and scale-across architectures. The company reported more than 100 cumulative customers deploying 800-gigabit Ethernet solutions and expects 1.6-terabit deployments to reach production scale in 2027. Management noted strong demand for its Etherlink portfolio, AI fabric offerings and networking software, which support diverse AI accelerators and increasingly complex AI workloads. The company is also seeing growing adoption among cloud providers, neocloud operators and AI infrastructure customers, supported by the scalability, reliability and observability of its EOS platform.

Arista Networks also demonstrated strong financial and operational execution. Arista generated approximately $1.69 billion in operating cash flow, the highest in its history, and ended the quarter with $12.35 billion in cash, cash equivalents and marketable securities. Management highlighted continued investments in innovation, including next-generation AI networking products, advanced optics technologies such as XPO, and enterprise expansion initiatives, positioning the company to address future growth opportunities.

Despite strong demand trends, Arista is facing industry-wide supply constraints across wafers, silicon chips, CPUs, optics, memory and other key components. Management stated that demand is currently outpacing supply and expects these challenges to persist for the next one to two years. To secure supply and support customer deployments, the company has entered into multiyear purchase commitments and is incurring higher procurement costs, which may continue to constrain shipment capacity and operational flexibility.

The challenging supply environment is also creating pressure on profitability. Gross margin declined to 62.4% from 63.4% in the previous quarter, primarily due to customer mix and elevated component costs. Management expects ongoing gross margin pressure as it absorbs higher expenses for memory, silicon and other critical inputs while prioritizing supply continuity for customers.

CIEN vs. ANET Share Price PerformanceOver the past six months, CIEN shares have gained 91.6%, while Arista has increased 33.5%.

Image Source: Zacks Investment Research

Valuation for CIEN & ANETIn terms of Price/Book, CIEN shares are trading at 22.53X, higher than ANET’s 16.3X.

Image Source: Zacks Investment Research

How Do Estimates Compare for CIEN & ANET?Analysts have significantly revised their earnings estimates upward for CIEN’s bottom line for the current year.

Image Source: Zacks Investment Research

For ANET, there have been marginal upward revisions for the current year.

Image Source: Zacks Investment Research

CIEN or ANET: Which is a Better Pick?While CIEN sports a Zacks Rank #1 (Strong Buy) at present, ANET has a Zacks Rank #3 (Hold). Consequently, in terms of Zacks Rank and valuation, CIEN seems to be a better pick at the moment.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks (ANET - Free Report) ended the recent trading session at $162.20, demonstrating a -7.08% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 1.44% for the day. Meanwhile, the Dow experienced a drop of 0.09%, and the technology-dominated Nasdaq saw a decrease of 2.22%.

Prior to today's trading, shares of the cloud networking company had gained 13.33% outpaced the Computer and Technology sector's gain of 0.98% and the S&P 500's gain of 0.08%.

Investors will be eagerly watching for the performance of Arista Networks in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.89, indicating a 21.92% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $2.82 billion, indicating a 27.95% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.63 per share and a revenue of $11.57 billion, representing changes of +21.81% and +28.46%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Arista Networks. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. At present, Arista Networks boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Arista Networks currently has a Forward P/E ratio of 48.04. For comparison, its industry has an average Forward P/E of 18, which means Arista Networks is trading at a premium to the group.

Investors should also note that ANET has a PEG ratio of 2.42 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 0.96.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 84, placing it within the top 35% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

In the latest trading session, Arista Networks (ANET - Free Report) closed at $164.93, marking a -1.83% move from the previous day. The stock's change was less than the S&P 500's daily loss of 1.22%. At the same time, the Dow lost 0.98%, and the tech-heavy Nasdaq lost 1.35%.

Shares of the cloud networking company witnessed a gain of 18.67% over the previous month, beating the performance of the Computer and Technology sector with its gain of 1.19%, and the S&P 500's gain of 1.56%.

The investment community will be closely monitoring the performance of Arista Networks in its forthcoming earnings report. The company is forecasted to report an EPS of $0.89, showcasing a 21.92% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $2.82 billion, indicating a 27.95% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.63 per share and a revenue of $11.57 billion, representing changes of +21.81% and +28.46%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Arista Networks. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.27% lower. Arista Networks currently has a Zacks Rank of #3 (Hold).

Looking at valuation, Arista Networks is presently trading at a Forward P/E ratio of 46.24. This indicates a premium in contrast to its industry's Forward P/E of 18.64.

It is also worth noting that ANET currently has a PEG ratio of 2.33. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 1.03.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 86, this industry ranks in the top 36% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Arista Networks (ANET - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Shares of this cloud networking company have returned +19.3% over the past month versus the Zacks S&P 500 composite's +2.1% change. The Zacks Internet - Software industry, to which Arista Networks belongs, has gained 2.7% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Arista Networks is expected to post earnings of $0.89 per share, indicating a change of +21.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The consensus earnings estimate of $3.63 for the current fiscal year indicates a year-over-year change of +21.8%. This estimate has changed -0.3% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $4.39 indicates a change of +20.8% from what Arista Networks is expected to report a year ago. Over the past month, the estimate has changed +0.5%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Arista Networks is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Arista Networks, the consensus sales estimate of $2.82 billion for the current quarter points to a year-over-year change of +28%. The $11.57 billion and $14.07 billion estimates for the current and next fiscal years indicate changes of +28.5% and +21.7%, respectively.

Last Reported Results and Surprise HistoryArista Networks reported revenues of $2.71 billion in the last reported quarter, representing a year-over-year change of +35.1%. EPS of $0.87 for the same period compares with $0.65 a year ago.

Compared to the Zacks Consensus Estimate of $2.62 billion, the reported revenues represent a surprise of +3.48%. The EPS surprise was +7.41%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Arista Networks is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Arista Networks. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Tech networking equipment company Arista Networks (ANET +4.48%) is going into the weekend on a high note. Its stock zoomed more than 4% higher on Friday, thanks to a new, bullish note from an analyst at an influential investment bank.

The $10 per share difference Before market open, Meta Marshall of Morgan Stanley raised her price target on Arista to $190 per share from $180. In doing so, the analyst maintained her overweight (read: buy) recommendation on the specialty tech stock.

Image source: Getty Images.

According to reports, Marshall's adjustment is based on her view that since many artificial intelligence (AI) implementations have reached the inference -- i.e., implementation -- stage, as opposed to the training phase, next-generation equipment makers are well positioned to benefit handsomely.

This also applies to what the pundit termed "CPU intensity," as more processing power is needed for the effective functioning of AI models.

Today's Change

(

4.48

%) $

7.00

Current Price

$

163.40

High value If anything, Marshall might be understating the case and underestimating Arista's potential. The company is not only a trusted supplier in its cloud networking segment but one that's about to ride a very large wave as AI implementations continue to scale up. This is a very attractive company and stock at the moment, and this price target bump is more than justified.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Arista Networks. The Motley Fool has a disclosure policy.

Yet even some bulls are beginning to question how much future growth is already reflected in the share price.

Shares of Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction) are up 5% in midday trading on Tuesday, June 2, changing hands at $127 and change after a Monday close of $121.33.

ANET is riding the AI networking demand and surging cash flow, but competition, AI spending reliance and customer concentration remain key risks.