The S&P 500 index is already a bit tech-heavy, with over a third of its constituents in the sector, but it's about to see that number pushed higher with four new AI stocks set to be added to the index later this month. Let's take a look at the S&P's newest members and whether investors should buy, hold, or pass on these stocks.
Sandisk One of the best-performing stocks in the market this year, Sandisk (SNDK +1.97%) has been riding the memory supercycle to huge revenue growth and a robust gross margin. The company is a pure-play NAND (flash) memory maker and has benefited from the current supply-demand imbalance in the industry.
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NAND supply remains constrained as the big three memory makers continue to put most of their efforts and resources into DRAM (dynamic random access memory) and specifically high bandwidth memory (HBM). At the same time, demand for flash continues to soar from the need for massive solid-state drives (SSDs) that store training data.
Sandisk has started to lock up customers with long-term deals for the first time ever, and AI seems to have potentially brought with it a structural shift where the typical boom-bust cycles are no longer the norm. Trading at a forward P/E of 5, the stock looks like a solid hold, with the NAND cycle looking like it will last longer than most expect.
Palo Alto Networks After Anthropic's Mythos model revealed extensive previously unknown software vulnerabilities, the importance of cybersecurity in the AI era took center stage. Palo Alto Networks (PANW -0.80%) is one of the leaders in AI security, and its earlier decision to stop selling point solutions and have customers consolidate on one of its platforms has been paying off.
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As a leader in next-generation security, Palo Alto has a bright future. However, the stock is extremely pricey, trading at a forward price-to-sales ratio (P/S) of 19, based on fiscal 2027 (ending September 2027) estimates, while growing its revenue by 34% last quarter. That's just too pricey in my book, and as such, I'd pass.
Dell AI data centers require more than just AI chips, and Dell Technologies (DELL +2.35%) has been benefiting by delivering customers custom end-to-end solutions with ongoing support. Its AI Factory includes everything from hardware -- like servers, networking equipment, power, cooling, storage, and data management infrastructure -- to software and security services. It also includes edge devices like PCs.
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The company is seeing surging revenue, up 58% last quarter, and it sees full-year revenue climbing 69%. Traditional servers and networking revenue skyrocketed 122%, while storage was up 26% and client solutions rose 20%. While Dell is a top-tier systems integrator with deep supply-chain scale and high-value enterprise services, it still functions largely as a hardware pass-through, and its 21% gross margin reflects that reality.
An investment in the stock largely comes down to the company continuing to ride the AI infrastructure wave and continuing to benefit from operating leverage as it scales. With the AI boom looking like it still has legs, the stock looks like a buy.
Image source: Getty Images.
Arista Networks Arista Networks (ANET +0.11%) is benefiting from AI chip clusters growing in size and complexity and the need to better manage AI networks. The company is a close partner with Broadcom, where it assembles its networking components together and layers on its Extensible Operating System (EOS) software platform so customers can easily manage their networks.
Microsoft and Meta Platforms are two of Arista's largest customers, and it's benefiting from their aggressive spending on AI infrastructure. However, it said it now has hundreds of customers that have adopted its solutions, up from only four or five in 2024. Arista grew its revenue by 38% last quarter and now expects its revenue to climb by 40% this year.
Despite the company's momentum, with the shares trading at a forward P/E of 37, based on 2027 analyst estimates, I'd pass on the stock at this time.
Key Takeaways ANET's 2026 sales and EPS estimates imply 39.1% and 35.6% growth, with EPS estimates up 11.3%.IBM's 2026 sales and EPS estimates imply 4.3% and 6.4% growth, while EPS estimates fell 0.7%.Arista surged 29.4% over the past year, while IBM fell 9.7%; IBM trades at a lower forward P/E. Arista Networks, Inc. (ANET - Free Report) and International Business Machines Corporation (IBM - Free Report) are leading players in the enterprise IT infrastructure and are benefiting from the rise of AI (artificial intelligence) and cloud computing. Arista offers one of the broadest product lines of data center and campus Ethernet switches and routers in the industry. It provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency.
IBM offers cloud and data solutions that aid enterprises in digital transformation. In addition to hybrid cloud services, the company provides advanced information technology solutions, computer systems, quantum computing and supercomputing solutions, enterprise software, storage systems and microelectronics.
With a focus on hybrid cloud and AI, both IBM and Arista are strategically positioned in the cloud infrastructure market, with overlapping presence in networking infrastructure, enterprise IT solutions and cloud/data-center ecosystems. 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 ANETArista holds a leadership position in 100-gigabit Ethernet switches and is increasingly gaining market traction in 200- and 400-gigabit high-performance switching products. It is witnessing solid demand trends among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack. Arista has made several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. It has introduced new 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, campus and data center infrastructure, sets it apart from other competitors in the industry.
In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance and programmability, enabling integration with third-party applications for network management, automation and orchestration. The company 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 and zero-touch automation, with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms. Arista is likely to benefit from its software-driven, data-centric approach, which helps customers build their cloud architecture and enhance the cloud experience they offer their clients.
However, Arista remains plagued by high operating costs. Total operating expenses in the second quarter of 2026 increased around 17.7% to $532.3 million, owing to higher headcount, new product introduction costs and higher variable compensation expenditures. Moreover, the redesign of products and their supply chain mechanism have eroded margins. Research & development costs rose to $348.2 million from $296.5 million. Lingering supply bottlenecks for advanced products, a concentrated customer base and stiff competition from other networking & cloud native infrastructure vendors are other headwinds for ANET.
The Case for IBMIBM is poised to benefit from healthy demand trends for hybrid cloud and AI, which drive the Software and Consulting segments. The company’s growth is expected to be aided by analytics, cloud computing and security in the long term. With a surge in traditional cloud-native workloads and associated applications, along with a rise in generative AI deployment, there is a radical expansion in the number of cloud workloads that enterprises are currently managing. This has resulted in heterogeneous, dynamic and complex infrastructure strategies, which have led firms to undertake a cloud-agnostic and interoperable approach to highly secure multi-cloud management, translating into a healthy demand for IBM hybrid cloud solutions.
In addition, the buyout of HashiCorp has significantly augmented IBM’s capabilities to assist enterprises in managing complex cloud environments. HashiCorp’s toolsets complement IBM Red Hat’s portfolio, bringing additional functionalities for cloud infrastructure management and bolstering its hybrid multi-cloud approach.
Despite solid hybrid cloud and AI traction, IBM is facing stiff competition from Amazon.com, Inc.’s (AMZN - Free Report) AWS and Microsoft Corporation’s (MSFT - Free Report) Azure. Increasing pricing pressure is eroding margins, and profitability has trended down over the years, barring occasional spikes. The company faces a potent threat from AI firm Anthropic as the latter’s Claude Code tool can modernize legacy COBOL systems — a foundational programming language deeply embedded in IBM’s mainframe ecosystem. With Claude Code proposing to substantially automate code exploration, documentation, refactoring and security analysis, it threatened to reduce enterprises’ reliance on specialized legacy service providers like IBM, putting its sustenance at stake.
How Do Zacks Estimates Compare for ANET & IBM?The Zacks Consensus Estimate for Arista’s 2026 sales and EPS implies year-over-year growth of 39.1% and 35.6%, respectively. The EPS estimates have trended up 11.3% over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for IBM’s 2026 sales and EPS indicates year-over-year growth of 4.3% and 6.4%, respectively. The EPS estimates have declined 0.7% over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of IBM & ANETOver the past year, IBM has plummeted 9.7% against the industry’s growth of 196.1%. ANET has surged 29.4% over the same period.
Image Source: Zacks Investment Research
IBM looks more attractive than Arista from a valuation standpoint. Going by the price/earnings ratio, IBM’s shares currently trade at 17.93 forward earnings, significantly lower than Arista’s 41.49.
Image Source: Zacks Investment Research
ANET or IBM: Which is the Better Pick?Arista currently carries a Zacks Rank #2 (Buy), while IBM has 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 2026. Arista has better price performance and better estimate revisions compared with IBM, although it is a bit expensive in terms of the valuation metric. Arista has shown steady revenue and EPS growth for years, while IBM has been facing a bumpy road.
Investors looking for the "next wave" in AI and cloud infrastructure may lean toward Arista, while those seeking a broad, resilient tech play may favor IBM. However, with a better Zacks Rank and emerging growth opportunities in AI and cloud infrastructure, Arista seems to have an edge over IBM and appears to be a better investment option at the moment.
3 AI Infrastructure Stocks to Watch Beyond NVIDIAArista Networks NYSE: ANET executives said the company is investing across its networking portfolio rather than making tradeoffs between AI and data-center switching, software, campus networking and routing, as it works toward its 2026 revenue outlook of $12.6 billion.
Speaking at the Goldman Sachs Communacopia and Technology Conference, Chief Financial Officer Chantelle Breithaupt said the outlook implies roughly 40% growth and provides substantial absolute-dollar capacity for research and development. Arista generally targets R&D spending of 8% to 10% of revenue, she said.
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Beyond the Foundry: 5 Infrastructure Stocks Tackling the AI BottlenecksPresident and Chief Technology Officer Ken Duda said the company’s work with sophisticated hyperscale customers on new technologies and customized systems supports its broader portfolio. Investments in hardware and software for large operators can flow into specialty cloud providers and enterprise deployments, he said.
Supply Chain, Demand Visibility and Margins Breithaupt said Arista raised its annual guidance by more than $1 billion after becoming more comfortable with supply availability and gaining greater order visibility. The company secured purchase commitments, received support from suppliers and had visibility into two quarters of purchase orders by the August timeframe, she said.
5 AI Infrastructure Stocks Smart Money Is Buying Before the Next SurgeWhile supply conditions have improved, Breithaupt cautioned that the industry is not fully beyond component constraints. Availability can be affected by a range of items, from major components such as chips and memory to peripheral items including printed circuit boards and power cables.
Arista’s multiyear purchase commitments nearly tripled to $9.7 billion, according to the discussion. Breithaupt characterized the increase as a demand signal rather than solely the result of component-price inflation. Chips have lead times of roughly 52 weeks, she said, prompting the company to make purchasing decisions well ahead of the order visibility it has in hand.
The company is comfortable with that approach because its portfolio is relatively flexible and components can be used across products and customers, Breithaupt said. Duda added that common switch models and components serve multiple customer types and use cases, helping reduce potential inventory-obsolescence risk.
Arista maintained its 2026 gross-margin outlook of 62% to 64%. Breithaupt said customer mix remains a primary variable, while tariff refunds are expected to contribute about 30 basis points for the year. The company also implemented a targeted price increase for products with meaningful exposure to memory and other component-cost inflation. The increase was intended to offset inflation rather than expand margins, she said.
EOS and Open Networking Duda said Arista continues to view its Extensible Operating System, or EOS, as a major differentiator. He said open-source network operating systems require extensive technical effort to assemble, validate and deploy across specific hardware platforms and customer use cases.
In hyperscale environments, open-source approaches are primarily used to support multisourcing and reduce dependence on a single software supplier, Duda said. He said Arista retains an advantage in demanding routing applications that require fast convergence, large routing tables, policy controls, tunnel encapsulation capabilities and operation within hardware-memory limits.
For cloud providers and enterprises, Duda said EOS, along with Arista’s CloudVision management platform, offers consistent operations across data centers, campuses, wide-area networks and cloud deployments. The same operating-system code runs across those environments, he said.
AI Networking Opportunities Executives highlighted AI infrastructure as a significant growth driver, particularly among NeoCloud providers. Duda said these customers seek best-of-breed technologies to optimize their full technology stacks and reduce token costs, rather than relying on a single-vendor system.
Arista’s offerings include networking capabilities for scale-out AI clusters, as well as CloudVision visibility into both network conditions and AI-server metrics such as flow control, congestion and retransmissions, Duda said. Breithaupt said the company remains selective in its commercial arrangements with NeoCloud customers, using measures such as prepayment where appropriate because not all emerging providers have equivalent financial backing.
Duda defined scale-across networking as the interconnection of AI clusters split across data centers. Unlike scale-out networking within a data center, scale-across applications require greater routing complexity and deeper buffering to account for the longer round-trip distance between geographically distributed clusters, he said.
Power, cooling and data-center-space constraints are driving customers to distribute GPU deployments across locations, creating demand for scale-across architectures and Arista’s 7800R Series platforms, according to Duda. Breithaupt said scale-across represented about 30% of Arista’s stated $3.5 billion AI revenue target for the year.
The company also sees a longer-term opportunity in scale-up networking, which connects accelerators within a rack or enclosure. Duda said Arista has limited share in that market today but expects Ethernet-based standardization, including ESUN, to create an opening. He expects activity to begin ramping in the latter part of 2027, with volume potentially arriving in early 2028.
Campus Growth and Capital Priorities Arista raised its campus revenue target to more than $1.25 billion for the year. Duda said the company initially won campus business from existing data-center customers, but is now seeing a growing share of new campus customers seeking alternatives to incumbent vendors.
The company cited its Cognitive Campus strategy, which includes always-on operations, zero-touch capabilities and zero-trust networking. Duda said Arista’s in-service software upgrades have become a differentiator for campuses supporting 24-hour operations such as hospitals, manufacturing facilities, logistics centers and media operations.
Breithaupt said Arista has roughly 5% market share in campus networking and views the segment as a high-volume, lower-dollar growth opportunity over multiple years.
On capital allocation, Breithaupt said working capital is the company’s first priority as it navigates what she described as step-function growth. Share repurchases remain opportunistic, while Arista continues to evaluate acquisition opportunities but has not identified a target that meets both its technology and cultural criteria.
Looking ahead, Duda said he is particularly interested in applying AI internally and within Arista’s products to build network engineering and operations assistants. Such tools could improve customer efficiency, uptime and operational management, he said.
About Arista Networks (NYSE:ANET)Arista Networks, Inc designs, develops and sells cloud networking solutions for large data centers, cloud service providers, internet companies, enterprises and other organizations. Its portfolio includes high-performance Ethernet switches, routers and wireless networking products used to connect servers, storage systems, users and applications across data center and campus environments.
The company's software offerings include Arista EOS, its Linux-based network operating system, and CloudVision, a cloud-based platform for network management, automation, monitoring and analytics.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
Should You Invest $1,000 in Arista Networks Right Now?Before you consider Arista Networks, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Arista Networks wasn't on the list.
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AI-driven networking companies have been waiting for a sign to either continue to pull back or reinvigorate a bull run, but Ciena Corp.'s NYSE: CIEN Q3 earnings report may invite more questions than answers. Despite strong earnings and revenue, coupled with continued robust demand for AI and optical networking, shares fell after the report. The culprits? An expectation that margins could moderate after receiving tariff refund benefits, and a general reckoning with the sky-high expectations investors have for the industry, may have contributed.
Still, Ciena's report offers a fresh read-through on AI-based networking demand that may be helpful for investors seeking diversified exposure. While Ciena provides optical networking systems and platforms, rivals Lumentum Holdings Inc. NASDAQ: LITE and Coherent Inc. NYSE: COHR offer optical components and transceivers. While not the strongest buy signal, Ciena's report does suggest that the recent sell-off may have improved the risk/reward calculation for these companies.
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A Closer Look at Ciena's EarningsCiena Today
$342.28 +21.28 (+6.63%)
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This is a fair market value price provided by Massive. Learn more.
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Ciena's top and bottom lines were strong on paper: adjusted earnings per share (EPS) of $2.11 on almost $1.7 billion in revenue, both comfortably above what analysts had predicted. Adjusted operating margin climbed to 22.5%, a record for the company. The EPS growth, in particular, was notable, as it was a full 215% higher than the figure from just one year ago.
Demand continues to significantly outpace supply, resulting in a backlog of $8.5 billion for Ciena (an increase of $800 million from last year). The company expects this to continue and sees a backlog of more than $10 billion by the end of the fiscal year. This helped drive a forecast of 30% year-over-year (YOY) revenue growth for fiscal 2027.
What May Be Behind Ciena's PlungeAfter all that good news, Ciena shares still fell in the hours immediately following the earnings release and remain down more than 15% over the five days surrounding it. Digging deeper into the report, in-line guidance for fiscal Q4 may not have met analysts' lofty expectations for the company's growth trajectory. Further, just two major customers accounted for 42% of the firm's quarterly revenue, leaving it highly vulnerable should one or both of those clients shift their business elsewhere or otherwise reduce their orders.
Notably, Ciena's most recent share price drop is somewhat unique compared to the broader industry. One of the company's primary competitors, Arista Networks NYSE: ANET, is down just 1.8% over the last five days; zooming out to the last month, CIEN shares have plunged by 22% while ANET is actually up close to 1%. This might suggest that Ciena's performance of late has been the result of factors internal to the company, rather than industry-wide.
Lumentum and Coherent: A Different Perspective on the Industry With Unique BenefitsLumentum Today
$984.75 +103.49 (+11.74%)
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This is a fair market value price provided by Massive. Learn more.
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$1,085.68$1,053.83
Both Lumentum and Coherent are off their earnings cycles as of early September, forcing investors to wait for the latest updates on their financial performance. However, these firms offer a different perspective on the industry thanks to their unique positions in the value chain. Both companies market photonic tools for use in AI-cluster connectivity applications. Demand across the space has been stellar, but there is a question as to whether the frenzied pace can continue.
Hyperscaler spending on photonics is robust, with some estimates placing AI hyperscaler capital expenditures at an estimated $500 billion or more this year alone. Because Lumentum and Coherent provide vital hardware for these applications, they have strong potential as pick-and-shovel plays that benefit from industry-wide demand because virtually all companies in the space will need their products.
The shift toward 800G and 1.6T optical interconnects in the coming years may be a major driver of continued demand for both companies. Each allows companies to significantly expand bandwidth in order to support larger clusters and connectivity tools. At this point, 800G is the primary volume product, but investors looking at a longer time horizon will expect 1.6T to impact hyperscalers in the years to come.
Coherent Today
$310.63 +28.77 (+10.21%)
As of 11:31 AM Eastern
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$95.50▼
$440.0075.58
$397.63
Across this widespread technological upgrade, Lumentum may be the stock to watch. It is the most pure-play photonics firm on this list and may therefore be best positioned to benefit from upgrades at scale. On the other hand, Coherent has broader exposure that also includes lasers used for industrial and semiconductor manufacturing, compound semiconductor materials, and more.
All three of these companies enjoy bullish forecasts from analysts across Wall Street, but investors will want to distinguish them for their different roles in the ongoing data center buildout. Ciena's latest earnings report may signal some turbulence, but the company has plenty of strengths. Lumentum and Coherent, on the other hand, may be poised to skyrocket as their products become even more vital.
Should You Invest $1,000 in Ciena Right Now?Before you consider Ciena, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Ciena wasn't on the list.
While Ciena currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
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After two back-to-back winning runs, the broader equity markets plunged sharply on Friday as a strong jobs report reignited fears of a probable interest rate hike in the impending Federal Reserve meeting later this month. The nonfarm payrolls report for August revealed that the U.S. economy added 162,000 jobs last month, outpacing the broad-based expectations of 53,000 job additions. In addition to a reversal of the summer slowdown in hiring, the unemployment rate held steady at 4.1%, portraying stable labor market conditions. This apparently pulled down equity markets, while bond yields surged.
Surging oil prices further strained the markets and increased concerns that elevated energy prices will drive inflation higher, leading to a likely rate hike. With a lasting peace agreement in the Middle East fading to oblivion, market uncertainty remained elevated. As investors employ a wait-and-see approach in a classic example of “backing and filling” in the market, they can benefit from “cash cow” stocks that garner higher returns. However, identifying cash-rich stocks alone does not make for a solid investment proposition unless it is backed by attractive efficiency ratios, such as return on equity (ROE). A high ROE ensures that the company is reinvesting cash at a high rate of return. The Allstate Corporation (ALL - Free Report) , Arista Networks, Inc. (ANET - Free Report) , Ross Stores, Inc. (ROST - Free Report) , Gartner, Inc. (IT - Free Report) and Micron Technology, Inc. (MU - Free Report) are some of the stocks with high ROE to profit from.
In order to shortlist stocks that are cash-rich with high ROE, we have added Cash Flow greater than $1 billion and ROE greater than X-Industry as our primary screening parameters. In addition, we have taken a few other criteria into consideration to arrive at a winning strategy.
Price/Cash Flow less than X-Industry: This metric measures how much investors pay for $1 of free cash flow. A lower ratio indicates that investors need to pay less for a better cash flow-generating stock.
Return on Assets (ROA) greater than X-Industry: This metric determines how much profit a company earns for every dollar of assets, which includes cash, accounts receivable, property, equipment, inventory and furniture. The higher the ROA, the better it is for the company.
5-Year EPS Historical Growth greater than X-Industry: This criterion indicates that continued earnings momentum has translated into solid cash strength.
Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform irrespective of the market environment.
Here are five of the 12 stocks that qualified the screening:
Allstate: Headquartered in Northbrook, IL, Allstate is the third-largest property-casualty (P&C) insurer and the largest publicly held personal lines carrier in the United States. The company also provides a range of life insurance and investment products to its diverse customer base. It provides insurance products to approximately 16 million households through more than 12,000 exclusive agencies and financial specialists in the United States and Canada.
The company has a long-term earnings growth expectation of 12.5% and delivered a trailing four-quarter earnings surprise of 45.3%, on average. It has a VGM Score of A. Allstate sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista: Santa Clara, CA-based Arista is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company holds a leadership position in 100-gigabit Ethernet switching for the high-speed datacenter segment. It is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.
The company has a long-term earnings growth expectation of 22.7%. It delivered a trailing four-quarter earnings surprise of 8.9%, on average. Arista sports a Zacks Rank #1.
Ross: Based in Dublin, CA, Ross is an off-price retailer of apparel and home accessories, offering in-season, branded and designer apparel, footwear, accessories and other home-related merchandise. Operating primarily in the United States, it targets middle-income households, keeping prices generally 20% to 60% below the regular prices of most department and specialty stores.
The company has a long-term earnings growth expectation of 14.6% and delivered a trailing four-quarter earnings surprise of 11.2%, on average. Ross carries a Zacks Rank #2 at present.
Gartner: Headquartered in Stamford, CT, Gartner is reportedly the world's leading information technology research and advisory firm. The company offers rich domain expertise and technology-related insight necessary for an informed decision-making process.
Gartner has a long-term earnings growth expectation of 20.1% and delivered a trailing four-quarter earnings surprise of 13.5%, on average. Gartner sports a Zacks Rank #1.
Micron: Headquartered in Idaho, Micron is one of the leading worldwide providers of semiconductor memory solutions. Through global brands, namely Micron, Crucial and Ballistix, it manufactures and markets high-performance memory and storage technologies, including Dynamic Random Access Memory, NAND flash memory, NOR Flash and other technologies. Its solutions are used in leading-edge computing, consumer, networking, mobile, automotive, industrial and data center products.
The company delivered a trailing four-quarter earnings surprise of 21.1%, on average. Micron carries a Zacks Rank #2 at present.
Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. However, it isn't easy to find a great growth stock.
That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.
However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Arista Networks (ANET - Free Report) is on the list of such stocks currently recommended by our proprietary system. In addition to a favorable Growth Score, it carries a top Zacks Rank.
Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Here are three of the most important factors that make the stock of this cloud networking company a great growth pick right now.
Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Arista Networks is 44.3%, investors should actually focus on the projected growth. The company's EPS is expected to grow 35.6% this year, crushing the industry average, which calls for EPS growth of 28.4%.
Cash Flow GrowthCash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because, high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.
Right now, year-over-year cash flow growth for Arista Networks is 31.2%, which is higher than many of its peers. In fact, the rate compares to the industry average of 9.6%.
While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 38.7% over the past 3-5 years versus the industry average of 17.8%.
Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
There have been upward revisions in current-year earnings estimates for Arista Networks. The Zacks Consensus Estimate for the current year has surged 1.3% over the past month.
Bottom LineArista Networks has not only earned a Growth Score of B based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #2 because of the positive earnings estimate revisions.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Arista Networks is a potential outperformer and a solid choice for growth investors.
Greenland Capital Management LP purchased a new position in shares of Arista Networks, Inc. (NYSE: ANET) during the undefined quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund purchased 4,085 shares of the technology company's stock, valued at approximately $694,000. Several other institutional investors and
California State Teachers Retirement System boosted its position in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) by 17,042.6% in the second quarter, according to the company in its most recent filing with the SEC. The firm owned 272,793,984 shares of the technology company’s stock after acquiring an additional 271,202,666 shares during the quarter. California State Teachers Retirement System owned about 21.63% of Arista Networks worth $46,342,242,000 at the end of the most recent reporting period.
A number of other hedge funds have also modified their holdings of the company. Norges Bank purchased a new stake in shares of Arista Networks in the fourth quarter worth about $1,558,563,000. Jupiter Topco LLC acquired a new stake in Arista Networks during the second quarter worth about $1,101,860,000. Alyeska Investment Group L.P. purchased a new position in Arista Networks during the second quarter valued at approximately $537,736,000. Franklin Resources Inc. raised its position in Arista Networks by 59.3% during the fourth quarter. Franklin Resources Inc. now owns 7,878,360 shares of the technology company’s stock valued at $1,032,302,000 after acquiring an additional 2,934,098 shares in the last quarter. Finally, Massachusetts Financial Services Co. MA lifted its holdings in Arista Networks by 34.6% in the second quarter. Massachusetts Financial Services Co. MA now owns 9,725,196 shares of the technology company’s stock valued at $1,712,788,000 after acquiring an additional 2,497,275 shares during the period. 82.47% of the stock is owned by institutional investors and hedge funds.
Insider Transactions at Arista Networks In related news, major shareholder Andreas Bechtolsheim sold 300,000 shares of the business’s stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $202.60, for a total transaction of $60,780,000.00. Following the completion of the sale, the insider directly owned 180,843,048 shares in the company, valued at approximately $36,638,801,524.80. The trade was a 0.17% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Kenneth Duda sold 26,000 shares of the stock in a transaction on Thursday, August 20th. The shares were sold at an average price of $185.42, for a total value of $4,820,920.00. Following the completion of the transaction, the insider directly owned 452,400 shares of the company’s stock, valued at approximately $83,884,008. This represents a 5.43% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders sold 3,782,694 shares of company stock valued at $726,728,187. Insiders own 2.70% of the company’s stock.
Wall Street Analyst Weigh In Several equities research analysts have commented on the company. The Goldman Sachs Group restated a “buy” rating and issued a $225.00 price objective on shares of Arista Networks in a research report on Wednesday, August 5th. Zacks Research upgraded shares of Arista Networks from a “hold” rating to a “strong-buy” rating in a research note on Monday, August 10th. Bank of America reissued a “buy” rating and set a $240.00 price target (up from $200.00) on shares of Arista Networks in a report on Wednesday, August 5th. Barclays restated an “overweight” rating and set a $289.00 price target (up from $195.00) on shares of Arista Networks in a research report on Wednesday, August 5th. Finally, TD Cowen lifted their price objective on shares of Arista Networks from $210.00 to $250.00 and gave the company a “buy” rating in a report on Wednesday, August 5th. Two analysts have rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and one has issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the company presently has an average rating of “Buy” and a consensus target price of $225.76. Get Our Latest Research Report on Arista Networks
Arista Networks Trading Down 0.1% Shares of Arista Networks stock opened at $193.54 on Monday. Arista Networks, Inc. has a twelve month low of $114.52 and a twelve month high of $214.89. The firm has a market capitalization of $244.10 billion, a PE ratio of 61.05, a P/E/G ratio of 2.30 and a beta of 1.62. The firm’s 50-day moving average price is $182.94 and its 200 day moving average price is $160.29.
Arista Networks (NYSE:ANET – Get Free Report) last posted its quarterly earnings data on Tuesday, August 4th. The technology company reported $1.02 EPS for the quarter, topping the consensus estimate of $0.89 by $0.13. Arista Networks had a return on equity of 30.65% and a net margin of 38.37%.The company had revenue of $3.04 billion during the quarter, compared to analyst estimates of $2.83 billion. During the same period in the previous year, the business earned $0.73 EPS. Arista Networks’s quarterly revenue was up 37.7% on a year-over-year basis. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. On average, sell-side analysts predict that Arista Networks, Inc. will post 3.7 EPS for the current fiscal year.
Key Headlines Impacting Arista Networks Here are the key news stories impacting Arista Networks this week:
Positive Sentiment: Arista’s investment case remains supported by surging AI infrastructure demand, improving supply-chain execution and strong free cash flow. The company’s shares have gained 37.3% over the past six months, although the recent advance has raised questions about how much upside remains. ANET Rises 37.3% in Six Months: Is There More Room to Grow? Positive Sentiment: The company’s latest quarterly results provide a fundamental catalyst: adjusted earnings of $1.02 per share exceeded the $0.89 consensus estimate, while revenue of $3.04 billion topped the $2.83 billion forecast and increased 37.7% year over year. Arista guided to third-quarter EPS of $1.06-$1.08. Arista Networks Offers Entry After 42% Gain Amid Earnings Beat; Data Center Demand Surging Positive Sentiment: Deutsche Bank initiated coverage with a Buy rating and a $220 price target. This adds to a generally favorable analyst view, with a consensus Buy rating and an average target of $225.76; UBS, Jefferies and Morgan Stanley have also cited targets above the current trading range. Neutral Sentiment: Arista edged higher even as networking peer Ciena weakened after issuing in-line guidance, suggesting investors may be differentiating ANET based on its stronger AI and cloud-networking growth outlook. Ciena Corporation Tumbles 10% as In-Line Guidance Overshadows Earnings Beat, Arista Edges Higher Negative Sentiment: CFO Chantelle Breithaupt sold 612 shares worth approximately $119,811. The transaction reduced her holdings by 0.87%, but it was executed under a pre-arranged Rule 10b5-1 plan, limiting its significance as a bearish signal. Arista’s elevated valuation—about 60 times earnings and a PEG ratio of 2.21—also leaves the stock sensitive to slower growth or weaker guidance. 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.
Featured Articles Five stocks we like better than Arista Networks AI Token Costs Are Changing the Hardware vs. Software Debate 3 ETFs That Could Move as Rate Expectations Shift 3 Stocks With September Catalysts Investors Shouldn’t Ignore Ollie’s Bargain Outlet Stock Falls on Weak Comps Despite Margin Gains 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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Nike Exits S&P 100 After Nearly 18 Years. Dell, SanDisk and 2 Tech Giants Take Its Place Nike stock suffers a new setback. Nearly 18 years in the S&P 100 comes to an end Summary
The index reshuffle adds four technology companies while Nike remains in the broader S&P 500
Nike (NKE) is losing its place among the S&P 100's largest companies as a September index reshuffle highlights the growing weight of technology stocks.
The apparel giant will exit the benchmark on Sept. 21, ending a tenure of almost 18 years. Its departure does not affect its membership in the S&P 500.
This happened after NKE stock fell about 40% in 2026.
Four technology companies, Dell Technologies DELL, Palo Alto Networks PANW, Arista Networks (ANET) and SanDisk SNDK, are being added to the S&P 100 in the latest rebalancing.
Nike's declining market value has accompanied a difficult operating period. The company finished fiscal 2026 with revenue of approximately $46.4 billion, with Nike Direct, online sales and its Greater China business all posting declines.
Weakness has also extended to inventory management and retail distribution, while changes to product categories, sales channels and marketing have drawn scrutiny.
The reshuffle puts Nike's recent struggles against a broader market shift toward technology companies. For Nike stock, the change could weigh on sentiment by underscoring the company's reduced market capitalization and slower growth.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Arista Networks: Steady and Reliable Quarterly Revenue ExpansionArista Networks (ANET +1.22%) primarily generates its operating income by designing advanced cloud networking solutions, delivering specialized high-performance switching hardware, and providing extensive post-contract technical support to major internet companies and global financial services organizations.
While launching new hardware platforms for data centers and simultaneously expanding its enterprise security portfolio during the summer of 2026, it reported a 45% operating margin for the quarter ended June 30, 2026.
International Business Machines: Highly Volatile and Cyclical Revenue PatternsInternational Business Machines (IBM +0.08%) earns a majority of its incoming cash by supplying complex hybrid cloud software ecosystems, developing enterprise server infrastructure, and delivering specialized business transformation consulting services to clients across the globe.
It faced multiple securities fraud investigations regarding its public business deal outlook and completed the acquisition of HRL Laboratories in the summer of 2026 to advance its work in quantum computing. It generated a 15% operating margin for the quarter ended June 30, 2026.
Why Tracking Revenue Matters for InvestorsRevenue assists everyday investors understand whether a business is successfully attracting new clients and expanding its broader operational footprint. It serves as a starting point to help investors understand the total amount of money a business brings in before deducting any operational expenses.
Comparing Quarterly Revenue for Arista Networks and International Business MachinesCalendar quarterArista Networks RevenueInternational Business Machines RevenueQ3 2024$1.8 billion (quarter ended Sept. 30, 2024)$15.0 billion (quarter ended Sept. 30, 2024)Q4 2024$1.9 billion (quarter ended Dec. 31, 2024)$17.6 billion (quarter ended Dec. 31, 2024)Q1 2025$2.0 billion (quarter ended March 31, 2025)$14.5 billion (quarter ended March 31, 2025)Q2 2025$2.2 billion (quarter ended June 30, 2025)$17.0 billion (quarter ended June 30, 2025)Q3 2025$2.3 billion (quarter ended Sept. 30, 2025)$16.3 billion (quarter ended Sept. 30, 2025)Q4 2025$2.5 billion (quarter ended Dec. 31, 2025)$19.7 billion (quarter ended Dec. 31, 2025)Q1 2026$2.7 billion (quarter ended March 31, 2026)$15.9 billion (quarter ended March 31, 2026)Q2 2026$3.0 billion (quarter ended June 30, 2026)$17.2 billion (quarter ended June 30, 2026)Data source: Company filings. Data as of Sept. 4, 2026.
Foolish TakeThe revenue trends for Arista Networks and IBM tell a starkly different story about the trajectories of these businesses benefiting from the massive artificial intelligence tailwind. The former has the advantage as companies rush to build out the data center computing infrastructure required to operate AI systems. This has allowed Arista to experience consistent upward sales growth every quarter, and the trend is poised to continue in Q3, with the company forecasting revenue to hit $3.3 billion.
Meanwhile, IBM has exhibited quarterly revenue volatility. This is a result of its business model, due to a mix of software, hardware, and consulting services. Big Blue's infrastructure segment, which sells mainframes, follows an upgrade cycle, and that division saw a 7% year-over-year Q2 sales decline, suggesting customer upgrades are complete for now. Also, Q2 revenue in its consulting division was flat year over year, as this area is highly variable in terms of customer spending.
IBM cut its 2026 full-year sales forecast as customers shifted spending toward businesses such as Arista, prioritizing AI data center buildouts amid concerns of supply shortages. Its HRL Laboratories acquisition points to the company betting on quantum computers to galvanize future growth. This segment of its business holds the promise of revolutionizing the computing industry.
Blalock Williams LLC decreased its stake in Arista Networks, Inc. (NYSE:ANET – Free Report) by 20.1% in the 2nd quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 13,594 shares of the technology company’s stock after selling 3,415 shares during the period. Arista Networks accounts for approximately 1.5% of Blalock Williams LLC’s holdings, making the stock its 15th largest position. Blalock Williams LLC’s holdings in Arista Networks were worth $2,309,000 as of its most recent SEC filing.
A number of other institutional investors and hedge funds also recently modified their holdings of ANET. ABS Investment Management LLC acquired a new position in shares of Arista Networks in the second quarter valued at $29,000. Kelleher Financial Advisors acquired a new stake in shares of Arista Networks in the second quarter valued at approximately $31,000. Sankala Group LLC acquired a new stake in shares of Arista Networks during the 4th quarter worth $27,000. Prosperity Bancshares Inc bought a new position in Arista Networks in the fourth quarter valued at approximately $28,000. Finally, Main Street Group LTD acquired a new position in Arista Networks during the first quarter worth about $26,000. 82.47% of the stock is owned by institutional investors.
Insider Activity at Arista Networks In related news, CFO Chantelle Breithaupt sold 612 shares of the stock in a transaction dated Tuesday, September 1st. The shares were sold at an average price of $195.77, for a total transaction of $119,811.24. Following the sale, the chief financial officer directly owned 69,921 shares of the company’s stock, valued at approximately $13,688,434.17. This represents a 0.87% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 300,000 shares of the company’s stock in a transaction on Thursday, August 27th. The shares were sold at an average price of $202.60, for a total value of $60,780,000.00. Following the transaction, the insider directly owned 180,843,048 shares in the company, valued at approximately $36,638,801,524.80. The trade was a 0.17% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 3,782,694 shares of company stock valued at $726,728,187 over the last ninety days. Insiders own 2.70% of the company’s stock.
Arista Networks Price Performance ANET opened at $193.54 on Friday. The firm has a market cap of $244.10 billion, a price-to-earnings ratio of 61.05, a PEG ratio of 2.27 and a beta of 1.62. The stock’s 50 day simple moving average is $182.94 and its 200 day simple moving average is $160.16. Arista Networks, Inc. has a 1 year low of $114.52 and a 1 year high of $214.89. Arista Networks (NYSE:ANET – Get Free Report) last released its quarterly earnings data on Tuesday, August 4th. The technology company reported $1.02 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.89 by $0.13. The firm had revenue of $3.04 billion for the quarter, compared to analysts’ expectations of $2.83 billion. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The company’s revenue for the quarter was up 37.7% compared to the same quarter last year. During the same quarter in the previous year, the company earned $0.73 earnings per share. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. As a group, sell-side analysts anticipate that Arista Networks, Inc. will post 3.7 EPS for the current year.
Key Headlines Impacting Arista Networks Here are the key news stories impacting Arista Networks this week:
Positive Sentiment: Arista’s investment case remains supported by surging AI infrastructure demand, improving supply-chain execution and strong free cash flow. The company’s shares have gained 37.3% over the past six months, although the recent advance has raised questions about how much upside remains. ANET Rises 37.3% in Six Months: Is There More Room to Grow? Positive Sentiment: The company’s latest quarterly results provide a fundamental catalyst: adjusted earnings of $1.02 per share exceeded the $0.89 consensus estimate, while revenue of $3.04 billion topped the $2.83 billion forecast and increased 37.7% year over year. Arista guided to third-quarter EPS of $1.06-$1.08. Arista Networks Offers Entry After 42% Gain Amid Earnings Beat; Data Center Demand Surging Positive Sentiment: Deutsche Bank initiated coverage with a Buy rating and a $220 price target. This adds to a generally favorable analyst view, with a consensus Buy rating and an average target of $225.76; UBS, Jefferies and Morgan Stanley have also cited targets above the current trading range. Neutral Sentiment: Arista edged higher even as networking peer Ciena weakened after issuing in-line guidance, suggesting investors may be differentiating ANET based on its stronger AI and cloud-networking growth outlook. Ciena Corporation Tumbles 10% as In-Line Guidance Overshadows Earnings Beat, Arista Edges Higher Negative Sentiment: CFO Chantelle Breithaupt sold 612 shares worth approximately $119,811. The transaction reduced her holdings by 0.87%, but it was executed under a pre-arranged Rule 10b5-1 plan, limiting its significance as a bearish signal. Arista’s elevated valuation—about 60 times earnings and a PEG ratio of 2.21—also leaves the stock sensitive to slower growth or weaker guidance. Analyst Upgrades and Downgrades A number of equities research analysts have commented on the company. Piper Sandler reiterated an “overweight” rating and issued a $240.00 price target (up from $181.00) on shares of Arista Networks in a research report on Wednesday, August 5th. The Goldman Sachs Group reissued a “buy” rating and set a $225.00 price objective on shares of Arista Networks in a report on Wednesday, August 5th. Raymond James Financial upgraded shares of Arista Networks from a “market perform” rating to an “outperform” rating and set a $164.00 target price for the company in a report on Friday, May 15th. Needham & Company LLC reiterated a “buy” rating and set a $260.00 price target (up from $200.00) on shares of Arista Networks in a report on Wednesday, August 5th. Finally, Zacks Research upgraded shares of Arista Networks from a “hold” rating to a “strong-buy” rating in a research note on Monday, August 10th. Two investment analysts have rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating and one has assigned a Hold rating to the stock. According to MarketBeat.com, the company presently has an average rating of “Buy” and an average target price of $225.76.
Check Out Our Latest Report on Arista Networks
Arista Networks Company 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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Ciena just posted a record quarter with earnings well above estimates, yet its stock cratered 10% while networking peers Arista and Cisco held firm or climbed. The divergence points to a specific pressure point that separates Ciena's story from the…
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Ciena Corporation‘s (NYSE:CIEN | CIEN Price Prediction) fiscal third-quarter beat wasn’t enough to save its stock this morning. An in-line fourth-quarter revenue outlook overshadowed record results and sparked a sharp de-rating in a name that had rallied hard on the AI networking build. Interestingly, Ciena’s peer-group stocks are holding firm, which makes the divergence the story of the session.
Ciena stock is down 10% to $320.38, cutting into a year that had shares up 51% through the prior close. The pullback extends a rough stretch, with Ciena now down 18% over the past month. Today’s move deepens a de-rating already in progress.
Meanwhile, Arista Networks (NYSE:ANET) stock is up 3% to $191.65, isolating Ciena’s specific guidance issue from the broader networking demand story. Meanwhile, Cisco Systems (NASDAQ:CSCO) stock is down 0.1% to $109.31. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which tracks the S&P 500 index, is up 1% to $773.17, and the iShares U.S. Technology ETF (NYSEARCA:IYW) is trading higher, so Ciena’s slide isn’t a broad-tape problem.
Guidance Reset Overshadows Record Quarter Ciena reported adjusted earnings per share of $2.11 for the quarter ended August 1, 2026, against a $1.72 analyst consensus, with revenue of $1.67 billion versus a $1.63 billion estimate, up 37% from $1.22 billion a year earlier. Ciena’s adjusted gross margin expanded to 46.4% from 41.9% in the prior-year period, a clean quality print behind the top-line acceleration. Ciena CEO Gary Smith stated, “Today’s outstanding financial performance demonstrates Ciena’s leadership in providing industry-leading, high-speed connectivity solutions as AI continues to drive compounding waves of network investment.”
The problem sits in the forward number. Ciena guided its fiscal fourth-quarter revenue to $1.75 billion plus or minus $50 million, a midpoint that only aligns with the $1.7 billion analyst consensus rather than clearing it. Ciena also raised its full fiscal year 2026 revenue guidance to $6.42 billion, up 35% year over year at the midpoint, but for a stock priced for acceleration, matching isn’t beating, according to Ciena Corporation.
Networking Peers Diverge as Concentration Risk Bites Two Ciena customers together accounted for 41.7% of quarterly revenue, meaning the AI-driven demand is real but narrow, according to Ciena Corporation. Ciena CFO Marc Graff called the period a record quarter, yet that concentration weighs heavier on the Ciena multiple when the forward guide only matches expectations. That mix is what powered today’s de-rating.
Arista Networks stock was up 42% year to date (YTD) through the prior close and is extending gains today on continued AI fabric momentum. Arista posted Q2 FY2026 non-GAAP EPS of $1.02 on $3.04 billion in revenue in its August report, its first three-billion-dollar quarter. Management pointed to Ethernet-based AI networking as a durable share opportunity, with a full-year revenue outlook of approximately $12.6 billion.
Cisco stock was up 44% year to date through the prior close after booking $4 billion in AI infrastructure orders in Q4 FY2026 and guiding fiscal 2027 AI infrastructure revenue to $7.5 billion. Cisco characterized the environment as a networking supercycle. Arista Networks and Cisco holding firm while Ciena resets is the cleanest evidence that this is a company-level issue, not a sector verdict.
Scorecard The table sets today’s session move against the YTD anchor through the prior close for each covered name. Ciena’s reset stands out against modest peer gains.
Name Session Move YTD Through Prior Close Ciena down 10% up 51% Arista Networks up 3% up 42% Cisco Systems down 0.1% up 44% What to Watch Next Ciena’s preliminary fiscal 2027 outlook calls for at least 30% revenue growth on a backlog of $8.5 billion exiting Q3 FY2026, so the December fourth-quarter report becomes the next real inflection point for the stock. Management framed the environment as a multi-year, supply-constrained investment cycle. That keeps the debate about pace and share rather than direction.
Position sizing in Ciena shares should account for both the customer concentration and the tendency of supply-constrained networking names to trade on incremental order signals rather than trailing beats. A moderate approach makes sense while the guide-versus-consensus gap sorts out. Ciena’s elevated valuation raises the bar for any forward number, and today’s tape shows what happens when it isn’t cleared.
The broader read is that AI networking demand remains intact, with Arista Networks and Cisco both carrying rich YTD gains. Follow-through in those two names during the afternoon session may indicate whether today’s Ciena move stays contained or spreads to peers. Ultimately, the IYW ETF trading higher today reinforces the containment case rather than a sector-wide unwind.
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A month has gone by since the last earnings report for Arista Networks (ANET - Free Report) . Shares have lost about 5.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Arista Networks due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Arista Networks, Inc. before we dive into how investors and analysts have reacted as of late.
Arista Q2 Earnings Surpass Estimates on Solid Revenue Growth
Arista reported strong second-quarter 2026 results with both adjusted earnings and revenues beating the Zacks Consensus Estimate.
The company posted a strong 37.7% year-over-year revenue increase, reflecting broad-based growth across its artificial intelligence (AI), cloud and enterprise networking businesses, supported by healthy customer demand and improved product availability.
Net Income
GAAP net income in the reported quarter increased to $1.21 billion or 95 cents per share from $888.8 million or 70 cents per share in the year-ago quarter, driven by higher revenues.
On a non-GAAP basis, net income was $1.3 billion or $1.02 per share compared with $934.2 million or 73 cents per share in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate of 89 cents.
Revenues
Quarterly revenues increased to $3.04 billion from $2.2 billion in the prior-year quarter, mainly due to solid growth in both Product and Service segments. The top line beat the consensus estimate of $2.83 billion.
Net quarterly sales from Products totaled $2.61 billion compared with $1.88 billion in the year-ago quarter, driven by strong demand for AI and enterprise networking solutions and improved supply chain execution.
Service revenues increased to $430.5 million from $327.8 million, reflecting continued growth in the installed customer base and higher maintenance and support services.
Other Details
Non-GAAP gross profit rose to $1.92 billion from $1.45 billion for respective margins of 63.4% and 65.6%. Total operating expenses were $532.3 million, up from $452.4 million in the year-ago quarter. Non-GAAP operating income for the quarter increased to $1.51 billion from $1.08 billion, with respective margins of 49.9% and 48.8%.
Cash Flow & Liquidity
In the first six months of 2026, Arista generated $2.78 billion in cash compared with $1.84 billion in the year-ago period. As of June 30, 2026, the company had $2.29 billion in cash and cash equivalents and $338.8 million in other long-term liabilities.
Outlook
For the third quarter of 2026, management expects revenues to be approximately $3.3 billion, driven by healthy growth momentum and solid demand trends. Non-GAAP operating margin is expected to be 48-49%, and non-GAAP earnings per share are expected to be between $1.06 and $1.08.
How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 22.82% due to these changes.
VGM ScoresAt this time, Arista Networks has a average Growth Score of C, a grade with the same score on the momentum front. However, the stock has a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Arista Networks has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry PlayerArista Networks belongs to the Zacks Internet - Software industry. Another stock from the same industry, AppFolio (APPF - Free Report) , has gained 16.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
AppFolio reported revenues of $281.12 million in the last reported quarter, representing a year-over-year change of +19.3%. EPS of $1.71 for the same period compares with $1.38 a year ago.
AppFolio is expected to post earnings of $1.78 per share for the current quarter, representing a year-over-year change of +35.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for AppFolio. Also, the stock has a VGM Score of B.
AI accelerators steal the spotlight, but a quieter layer of the buildout is capturing an outsized share of the capex flowing into every new GPU cluster. Three networking stocks sit at that choke point, and each just raised its outlook.
AI accelerators get the headlines, but the money increasingly flows to the plumbing. Every new GPU or XPU cluster multiplies the volume of data that must move between chips, racks, and now entire data centers. That is where the connectivity layer wins. Ethernet switching, optical interconnects, and custom networking silicon are quietly becoming the choke point (and the profit pool) of the AI buildout (we pulled together seven suppliers benefiting from exactly this dynamic, from power to cooling to networking, in a free report you can grab here).
Three US-listed names sit at the center of this niche heading into September 2026. Each just posted a strong quarter, each has raised its AI outlook, and each addresses a different slice of the data movement problem.
Arista Networks: The Ethernet Pure-Play Scaling Across Data Centers Arista Networks (NYSE:ANET | ANET Price Prediction) is the cleanest way to own AI Ethernet. Shares closed at $190.94 on August 25, 2026, up 45.72% year to date and 43.52% over the past year.
Q2 FY26 hit a milestone. Revenue reached just over $3 billion, up 37.7% year over year, with non-GAAP EPS of $1.02 and operating margin of 49.9%. Management raised full-year revenue guidance to approximately $12.6 billion, implying 40% annual growth, and set an AI Fabrics target of at least $3.5 billion.
CEO Jayshree Ullal framed the opportunity bluntly: "Our AI fabrics momentum with EtherLink switches now exceeds 100 cumulative customers from the initial four to five customers I spoke of in 2024." She also sized the emerging scale-across market at $15 to $20 billion in 2030. Arista is layering in the 7060XE7 with liquid cooling, MRC multipath routing, and SRv6, all aimed at keeping expensive XPU cycles utilized.
The bull case: analysts skew heavily positive, with 7 strong buys and 22 buys against a single hold and a $241.82 target. Model-based forecasts imply 26.56% upside to a $241.66 base case.
Risk to watch: valuation is stretched at a trailing P/E of 60x, and Ullal cautioned that industry supply constraints are "going to be a two-year problem" not resolved until 2028.
Broadcom: Custom Silicon Plus Networking at Hyperscaler Scale Broadcom (NASDAQ:AVGO) is the diversified powerhouse of the group. Shares traded at $356.74 on August 25, up 22.14% over the past year but down 6.59% in the past month, offering a rare pullback in an otherwise vertical AI complex.
Q2 FY26 revenue was a record $22.2 billion, up 48% year on year. AI semiconductor revenue reached $10.8 billion, up 143% year-over-year. Critically for this thesis, CEO Hock Tan noted that "Networking represented almost 40% of our Q2 AI revenue" and that "Demand for XPUs and networking is simply insatiable."
The forward numbers are where conviction builds. Q3 guidance calls for AI semi revenue of $16 billion, up over 200% year on year, with a fiscal 2026 AI target of $56 billion and a fiscal 2027 target in excess of $100 billion. Visibility now runs "all the way to 2028", backed by over $30 billion in AI semiconductor bookings.
Product breadth is the moat: Tomahawk 6 100T switches, Jericho fabric, 1.6T DSPs, and co-packaged optics. The Google TPU partnership, Meta MTIA deal, OpenAI silicon program, and a planned 20 gigawatts of compute capacity through 2028 with Apollo and Blackstone all funnel into Broadcom’s networking silicon.
Risk to watch: customer concentration in a handful of hyperscalers, and the recent drawdown reflects sensitivity to any hint of order slippage. Analyst sentiment remains 92% bullish with a consensus target of $526.30.
Marvell Technology: The Interconnect Specialist With Accelerating Growth Marvell Technology (NASDAQ:MRVL) is the smallest of the three by market cap and the most explosive year to date. Shares closed at $240.38 on August 25, up 183.27% year to date and 230.22% over the past year. The one-week move alone was 11.29%.
Q1 FY27 delivered record revenue of $2.418 billion, up 28% year-over-year, with Data Center at $1.83 billion, or 76% of total revenue. CEO Matt Murphy raised the fiscal 2027 interconnect growth outlook to more than 70% year over year, up from a prior 50%, saying: "Our networking products, including interconnect and switching, are driving strong revenue growth as networking becomes increasingly critical with each new generation of AI infrastructure."
The company sees fiscal 2027 revenue near $11.5 billion and fiscal 2028 near $16.5 billion, with custom silicon on track for over $10 billion in fiscal 2029. The Celestial AI and Polariton acquisitions position Marvell for scale-up optics and next-generation photonics, and the expanded NVIDIA partnership around NVLink Fusion bridges custom and merchant silicon.
Analysts show 88% bullish sentiment with a $266.36 consensus target and 16.78% modeled upside.
Risk to watch: beta of 2.25 means volatility cuts both ways, and hyperscaler concentration plus integration risk from back-to-back acquisitions leave less margin for execution slips.
Positioning Into September The connectivity layer is where AI capex meets recurring silicon and optical content per gigawatt. Arista owns the pure Ethernet story, Broadcom owns the scaled hyperscaler stack, and Marvell owns the accelerating interconnect and custom silicon ramp. All three sit inside the same secular buildout, but each answers a different question about how investors want to express the trade.
Contact [email protected] for any questions or corrections.
Arista Networks (ANET - Free Report) closed the last trading session at $190.94, gaining 12.5% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $242 indicates a 26.7% upside potential.
The mean estimate comprises 24 short-term price targets with a standard deviation of $23.23. While the lowest estimate of $185.00 indicates a 3.1% decline from the current price level, the most optimistic analyst expects the stock to surge 51.4% to reach $289.00. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.
But, for ANET, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Here's Why There Could be Plenty of Upside Left in ANETThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The Zacks Consensus Estimate for the current year has increased 12.7% over the past month, as 11 estimates have gone higher compared to no negative revision.
Moreover, ANET currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much ANET could gain, the direction of price movement it implies does appear to be a good guide.
Sometimes, picking a stock or two to buy out of the thousands trading on the U.S. market can be a grueling task. Other times, the answers are right in front of you. Some companies genuinely look like no-brainer buys, with attractive businesses, sizable upside potential, and strong analyst support. That is especially true in today's artificial intelligence (AI) market.
Image source: Getty Images.
For example, these three companies are no-brainer stock buys for the back half of 2026. They're among the biggest beneficiaries of the AI spending wave. They are helping reshape the sector -- one data center, router switch, and chip at a time. Moreover, they are operating some of the strongest, most profitable businesses in the space, and analysts are largely optimistic about their prospects.
1. Arista Networks is a key AI networking beneficiary Arista Networks (ANET -2.84%) is a promising contender in the AI space. The company sells connectivity hardware and network management solutions, tools that every cloud provider and data center needs. And with every new facility that goes up, demand for reliable connectivity rises.
Its prospects look even better when you consider that Arista has deep relationships with Microsoft, Meta Platforms, and Oracle.
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Most importantly, Arista has a well-documented track record of translating its positioning and partnerships into tangible financial results. The second quarter marked the company's first time booking $3 billion in quarterly revenue, and it did so while making significant improvements on both margins and earnings.
Wall Street is not sleeping on this opportunity. Among the 25 analysts covering the stock, 22 rate it a strong buy (the remaining three call it a moderate buy), with 20% expected upside over the next 12 months based on the average price target. The most optimistic of those analysts sees up to 54% upside.
2. Nvidia still sets the pace in AI chips You knew this would be on the list, and you likely know why it is here. But let's walk through the reasons anyway.
With a market cap of more than $5 trillion, Nvidia (NVDA -4.58%) is the most valuable company in the world. Its technology is the centerpiece of the AI revolution. The stock is up 571,561% since its 1999 IPO. Its processors are selling out faster than its foundry partners can make them.
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And with AI infrastructure spending showing no signs of slowing down, Nvidia still has plenty of room to run. But just how high is its ceiling?
Right now, 43 out of 48 analysts covering Nvidia rate it a strong buy, and just one views it as a strong sell. Meanwhile, the average price target of $307.38 suggests a potential upside of 47%, the highest on this list. And the $500 high target price suggests upside of 134%.
Think about that for a second: If Nvidia reaches that high target price, it would become a $12 trillion company.
Ambitious? Perhaps. But stranger things have happened in the market.
3. Amazon's AWS growth highlights its AI momentum Amazon (AMZN +3.97%) is another well-known tech company enjoying meaningful traction in the AI industry. In the second quarter, the company reported a 20% year-over-year jump in revenue, from $168 billion to $200 billion.
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Now, the bulk of its revenue still comes from its high-volume, low-margin e-commerce business. However, with 37% top-line growth, the Amazon Web Services segment outgrew both the North America and international commerce segments (up 16% and 15%, respectively) on a percentage basis, suggesting Amazon's AI bet is starting to pay off.
Currently, 49 out of 57 analysts covering Amazon rate it a strong buy, six call it a moderate buy, and just two view it as a hold. And its average price target of $326.49 is 25% higher than where it's trading now. The highest analyst target price of $405 suggests potential upside of 55%.
Your next AI investments Sometimes the best opportunities really are the ones already sitting in plain sight, especially in the second half of the year, when it pays to focus on the businesses with the clearest momentum.
These three companies offer a compelling case for the idea that you don't need to overthink your next AI investments. Arista Networks, Nvidia, and Amazon each sit at the center of the AI build-out, backed by strong fundamentals and analyst confidence, and they look like the kind of no-brainer buys that investors will want to own in this market.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Let's take a look at what these Wall Street heavyweights have to say about Arista Networks (ANET - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Arista Networks currently has an average brokerage recommendation (ABR) of 1.10, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 25 brokerage firms. An ABR of 1.10 approximates between Strong Buy and Buy.
Of the 25 recommendations that derive the current ABR, 22 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 88% and 12% of all recommendations.
Brokerage Recommendation Trends for ANET
Check price target & stock forecast for Arista Networks here>>>
While the ABR calls for buying Arista Networks, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is ANET Worth Investing In?In terms of earnings estimate revisions for Arista Networks, the Zacks Consensus Estimate for the current year has increased 12.7% over the past month to $4.04.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Arista Networks. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Arista Networks may serve as a useful guide for investors.
Barbara Oil Co. bought a new position in Arista Networks, Inc. (NYSE:ANET – Free Report) during the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The fund bought 7,370 shares of the technology company’s stock, valued at approximately $1,246,000.
A number of other hedge funds also recently bought and sold shares of the business. Brighton Jones LLC increased its position in Arista Networks by 321.7% during the 4th quarter. Brighton Jones LLC now owns 7,806 shares of the technology company’s stock valued at $863,000 after purchasing an additional 5,955 shares during the period. Revolve Wealth Partners LLC purchased a new position in Arista Networks during the fourth quarter valued at $202,000. Bison Wealth LLC bought a new position in Arista Networks in the 4th quarter worth about $251,000. Sivia Capital Partners LLC increased its stake in Arista Networks by 48.4% during the 2nd quarter. Sivia Capital Partners LLC now owns 10,723 shares of the technology company’s stock valued at $1,097,000 after purchasing an additional 3,496 shares in the last quarter. Finally, Gamco Investors INC. ET AL increased its stake in Arista Networks by 31.3% during the 2nd quarter. Gamco Investors INC. ET AL now owns 4,193 shares of the technology company’s stock valued at $429,000 after purchasing an additional 1,000 shares in the last quarter. Hedge funds and other institutional investors own 82.47% of the company’s stock.
Key Headlines Impacting Arista Networks Here are the key news stories impacting Arista Networks this week:
Positive Sentiment: Arista’s leadership in high-speed networking for cloud and AI infrastructure is highlighted as a key advantage over Salesforce, reinforcing the company’s long-term growth profile. Arista Networks vs. Salesforce: Which Technology Stock Is a Better Buy in 2026? Positive Sentiment: ANET was included among high-return-on-equity, cash-rich stocks that may appeal to investors seeking quality during volatile markets. Arista’s reported return on equity was approximately 31%. 5 High ROE Stocks to Buy as Markets Sway on Intense Volatility Positive Sentiment: Arista has nearly tripled multiyear purchase commitments to roughly $9.7 billion, suggesting management is securing components in anticipation of sustained AI and cloud demand. The spending also signals confidence in a sizable future order pipeline, though it raises execution and inventory risks. Can ANET Stock Compound Its Way Higher? Positive Sentiment: Arista’s second-quarter performance was presented as strong enough to support a higher price target. The company recently beat consensus earnings and revenue estimates and issued third-quarter EPS guidance of $1.06 to $1.08. Arista Networks: Q2 2026 Justifies A Higher Price Target Neutral Sentiment: Compared with CoreWeave, Arista generates substantially more revenue and has delivered steadier quarter-over-quarter growth, while CoreWeave is expanding faster. The comparison supports Arista’s scale but highlights increasing competition in AI infrastructure. Arista Networks vs. CoreWeave: What Revenue Trends Tell Investors About These Artificial Intelligence Companies Negative Sentiment: At an elevated valuation, investors are paying for continued rapid growth. Arista’s future margins could depend heavily on the mix and profitability of customers behind its large capacity commitments. What You Are Really Paying For In Arista Networks Stock Wall Street Analysts Forecast Growth Several brokerages have recently issued reports on ANET. The Goldman Sachs Group reiterated a “buy” rating and issued a $225.00 target price on shares of Arista Networks in a research note on Wednesday, August 5th. KeyCorp reissued an “overweight” rating and set a $250.00 price target (up from $200.00) on shares of Arista Networks in a research report on Wednesday, August 5th. Erste Group Bank upgraded shares of Arista Networks from a “hold” rating to a “buy” rating in a report on Wednesday, July 15th. Morgan Stanley reaffirmed an “overweight” rating and issued a $220.00 price objective (up from $190.00) on shares of Arista Networks in a research report on Wednesday, August 5th. Finally, Wolfe Research reiterated an “outperform” rating and set a $175.00 target price on shares of Arista Networks in a research note on Wednesday, June 10th. 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. According to MarketBeat, the stock presently has an average rating of “Buy” and a consensus target price of $226.05. Read Our Latest Stock Report on ANET
Insider Activity at Arista Networks In other news, major shareholder Andreas Bechtolsheim sold 111,848 shares of the firm’s stock in a transaction on Thursday, August 6th. The stock was sold at an average price of $192.75, for a total value of $21,558,702.00. Following the transaction, the insider directly owned 109,833 shares in the company, valued at $21,170,310.75. This trade represents a 50.45% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Kenneth Duda sold 26,000 shares of Arista Networks stock in a transaction on Monday, July 20th. The stock was sold at an average price of $170.51, for a total value of $4,433,260.00. Following the completion of the sale, the insider directly owned 462,400 shares of the company’s stock, valued at $78,843,824. The trade was a 5.32% 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. In the last 90 days, insiders sold 4,128,775 shares of company stock worth $767,332,289. Company insiders own 2.70% of the company’s stock.
Arista Networks Stock Up 0.3% Shares of NYSE ANET opened at $189.15 on Monday. The firm’s 50-day moving average price is $177.57 and its 200-day moving average price is $156.40. The company has a market cap of $238.56 billion, a PE ratio of 59.67, a PEG ratio of 1.95 and a beta of 1.60. Arista Networks, Inc. has a 52-week low of $114.52 and a 52-week high of $214.89.
Arista Networks (NYSE:ANET – Get Free Report) last released its quarterly earnings data on Tuesday, August 4th. The technology company reported $1.02 earnings per share for the quarter, beating the consensus estimate of $0.89 by $0.13. The firm had revenue of $3.04 billion during the quarter, compared to analysts’ expectations of $2.83 billion. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The firm’s quarterly revenue was up 37.7% on a year-over-year basis. During the same period in the previous year, the company earned $0.73 earnings per share. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. As a group, equities research analysts anticipate that Arista Networks, Inc. will post 3.7 EPS for the current fiscal year.
(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.
Featured Articles Five stocks we like better than Arista Networks VIG, VYM, and VYMI: Which Vanguard Dividend ETF Is Right for You? 3 Closed-End Funds to Maximize Dividend Payments Rocket Lab’s Sell-Off Is Fading—Is It Finally Safe to Buy? $27 Billion in Buybacks: 3 Stocks Betting Their Strong Runs Aren’t Over 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: Consistent Quarterly Revenue Expansion PatternsArista Networks (ANET -1.21%) primarily generates revenue by designing and distributing specialized hardware switches, advanced networking software, and comprehensive technical support services for large data center operators and global internet service providers.
It recently introduced new network security capabilities while securing long-term memory supply agreements for future production. It generated a 40% net income margin for the quarter ended June 30, 2026.
CoreWeave: Scaling Revenue Through Expanding Specialized Computing InfrastructureCoreWeave (CRWV -1.57%) primarily generates revenue by offering flexible, high-performance cloud computing environments, digital storage, and custom rendering services directly to enterprise clients and large hyperscale users.
It recently expanded its international data center footprint into new geographical regions while securing substantial fresh debt financing. It recorded a negative 24% net income margin for the quarter ended June 30, 2026.
Why Analyzing Revenue Matters for InvestorsRevenue serves as the most fundamental baseline measurement showing exactly how much total capital a business brings in through its core commercial activities before deducting any operational expenses. This metric helps investors measure a company's overall size, market footprint, and long-term trajectory.
Tracking Quarterly Revenue for Arista Networks and CoreWeaveCalendar quarterArista Networks RevenueCoreWeave RevenueQ3 2024$1.8 billion (quarter ended Sept. 30, 2024)$583.9 million (quarter ended Sept. 30, 2024)Q4 2024$1.9 billion (quarter ended Dec. 31, 2024)$747.4 million (quarter ended Dec. 31, 2024)Q1 2025$2.0 billion (quarter ended March 31, 2025)$981.6 million (quarter ended March 31, 2025)Q2 2025$2.2 billion (quarter ended June 30, 2025)$1.2 billion (quarter ended June 30, 2025)Q3 2025$2.3 billion (quarter ended Sept. 30, 2025)$1.4 billion (quarter ended Sept. 30, 2025)Q4 2025$2.5 billion (quarter ended Dec. 31, 2025)$1.6 billion (quarter ended Dec. 31, 2025)Q1 2026$2.7 billion (quarter ended March 31, 2026)$2.1 billion (quarter ended March 31, 2026)Q2 2026$3.0 billion (quarter ended June 30, 2026)$2.6 billion (quarter ended June 30, 2026)Data source: Company filings. Data as of Aug. 17, 2026.
Foolish TakeLooking at the revenue trends of Arista Networks and CoreWeave shows both are experiencing quarter-over-quarter sales growth. That's an impressive feat, and indicative of the large customer demand for their respective offerings.
Both companies are benefiting from the massive artificial intelligence tailwind. CoreWeave provides the data centers and computing infrastructure needed to house AI systems. Arista's networking solutions are key components of data center equipment.
The quarterly growth trend for these businesses is expected to continue into the third quarter. Arista Networks forecasts Q3 sales to hit $3.3 billion. CoreWeave anticipates an enormous jump up to at least $3.5 billion in Q3 revenue.
For investors seeking to buy shares in these two, the revenue trajectories for both appear promising. However, it's important to look beyond sales. Arista produced robust Q2 net income of $1.2 billion, but CoreWeave suffered a Q2 net loss of $626 million, demonstrating the former's financial health while the latter has yet to turn a profit.
Arista Networks, Inc. (NYSE: ANET - Get Free Report) was the target of a large decrease in short interest in July. As of July 31st, there was short interest totaling 12,815,409 shares, a decrease of 35.6% from the July 15th total of 19,887,856 shares. Based on an average daily trading volume, of 6,608,958 shares, the short-interest
Abacus FCF Advisors LLC trimmed its position in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) by 8.2% during the 2nd quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 69,525 shares of the technology company’s stock after selling 6,237 shares during the quarter. Arista Networks accounts for approximately 2.2% of Abacus FCF Advisors LLC’s holdings, making the stock its 16th largest position. Abacus FCF Advisors LLC’s holdings in Arista Networks were worth $11,811,000 at the end of the most recent reporting period.
Other hedge funds have also recently modified their holdings of the company. Kelleher Financial Advisors purchased a new position in shares of Arista Networks during the 2nd quarter valued at $31,000. Sankala Group LLC bought a new stake in shares of Arista Networks in the 4th quarter worth about $27,000. Prosperity Bancshares Inc bought a new stake in Arista Networks during the fourth quarter worth approximately $28,000. Main Street Group LTD bought a new position in shares of Arista Networks during the 1st quarter valued at approximately $26,000. Finally, Quarry LP bought a new stake in Arista Networks in the third quarter worth $33,000. Institutional investors own 82.47% of the company’s stock.
Key Arista Networks News Here are the key news stories impacting Arista Networks this week:
Positive Sentiment: Arista is benefiting from accelerating AI infrastructure spending. Its Etherlink customer base has surpassed 100, while demand from customers using different AI architectures could broaden the company’s addressable market and support continued growth. Arista Benefits From AI Networking Surge: Will Momentum Persist? Positive Sentiment: One comparison of Arista with Palantir portrays ANET as the more attractively valued growth company, citing roughly 51 times forward earnings, no debt and net margins near 39%. That framing may support investor interest in Arista relative to other expensive AI-related stocks. Arista Networks vs. Palantir Technologies: Which Technology Stock Is a Better Buy in 2026? Positive Sentiment: Additional analysis points to sustained revenue growth, reinforcing the bullish case that cloud, data-center and AI networking demand can continue driving Arista’s results. What’s Fueling Arista Networks Revenue Growth? Neutral Sentiment: Arista’s Rosenblatt Technology Summit presentation focused on the company’s role in the AI networking buildout. The transcript may provide further detail on strategy and demand, but it did not introduce a clearly new financial catalyst. Rosenblatt Technology Summit Transcript Neutral Sentiment: A roundup of institutional-investor positioning reflects greater selectivity toward AI and technology stocks, but does not report a specific change in Arista’s fundamentals or analyst outlook. Bet on Smart Money With These Stocks and ETFs Negative Sentiment: Valuation remains a key risk. Arista’s superior operating performance is reflected in its premium multiple, while future profitability depends on which customers generate the volume being secured; a less favorable customer mix could pressure margins. What You Are Really Paying For In Arista Networks Stock Analyst Ratings Changes A number of brokerages recently weighed in on ANET. Deutsche Bank Aktiengesellschaft upgraded shares of Arista Networks to a “buy” rating in a report on Wednesday, June 10th. Morgan Stanley reissued an “overweight” rating and issued a $220.00 price objective (up from $190.00) on shares of Arista Networks in a research report on Wednesday, August 5th. Wolfe Research reaffirmed an “outperform” rating and set a $175.00 price target on shares of Arista Networks in a research report on Wednesday, June 10th. Erste Group Bank raised shares of Arista Networks from a “hold” rating to a “buy” rating in a report on Wednesday, July 15th. Finally, UBS Group reaffirmed a “buy” rating and set a $259.00 price objective (up from $187.00) on shares of Arista Networks in a research note on Wednesday, August 5th. Two 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 stock. Based on data from MarketBeat.com, the stock has an average rating of “Buy” and a consensus target price of $226.05. Get Our Latest Stock Analysis on Arista Networks
Arista Networks Stock Performance NYSE ANET opened at $186.34 on Thursday. The business has a fifty day moving average price of $176.50 and a 200 day moving average price of $155.75. The company has a market cap of $235.02 billion, a P/E ratio of 58.78, a P/E/G ratio of 2.00 and a beta of 1.60. Arista Networks, Inc. has a one year low of $114.52 and a one year high of $214.89.
Arista Networks (NYSE:ANET – Get Free Report) last posted its quarterly earnings results on Tuesday, August 4th. The technology company reported $1.02 earnings per share for the quarter, topping analysts’ consensus estimates of $0.89 by $0.13. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The firm had revenue of $3.04 billion for the quarter, compared to analyst estimates of $2.83 billion. During the same period in the previous year, the business posted $0.73 earnings per share. Arista Networks’s quarterly revenue was up 37.7% on a year-over-year basis. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. As a group, sell-side analysts predict that Arista Networks, Inc. will post 3.7 EPS for the current fiscal year.
Insider Buying and Selling In other Arista Networks news, CEO Jayshree Ullal sold 767,029 shares of the firm’s stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $201.22, for a total value of $154,341,575.38. Following the completion of the sale, the chief executive officer directly owned 16,387,981 shares of the company’s stock, valued at $3,297,589,536.82. This trade represents a 4.47% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 300,000 shares of Arista Networks stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $203.30, for a total value of $60,990,000.00. Following the transaction, the insider owned 181,143,048 shares in the company, valued at approximately $36,826,381,658.40. This represents a 0.17% 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 4,333,775 shares of company stock worth $798,438,989 over the last three months. Corporate insiders own 2.70% of the company’s stock.
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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Beyond the Foundry: 5 Infrastructure Stocks Tackling the AI BottlenecksArista Networks NYSE: ANET executives said demand for AI networking remains broad-based across cloud providers, AI labs, neoclouds, enterprises and campus customers, while supply availability remains a constraint on the company’s ability to meet that demand.
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Speaking at the Rosenblatt Age of AI technology conference, Chief Financial Officer Chantelle Breithaupt said the company’s Etherlink AI networking portfolio has expanded from four or five customers in 2024 to more than 100 customers. The portfolio initially focused on 800G scale-out networking and has since expanded to address scale-across and, eventually, scale-up AI networking opportunities.
5 AI Infrastructure Stocks Smart Money Is Buying Before the Next SurgeBreithaupt said the company’s 40% revenue-growth outlook is supported by activity across customer categories rather than a single source of demand. “It is more of the same,” she said, citing increased activity among neoclouds, hyperscale customers, AI labs, enterprises and campus deployments.
Demand Seen as Project-Driven, Not Supply Pull-Forward Breithaupt said Arista does not view current demand as primarily driven by customers placing orders early because of component shortages. Instead, she said customer conversations and project timelines point to underlying demand for AI infrastructure and faster deployment.
These 3 ETFs Are Suitable for Ultra-Bearish Investors“We do not see pull forward at all,” Breithaupt said, adding that any acceleration would be more likely tied to customers seeking to reach AI outcomes sooner than to supply scarcity. She noted that long lead times make it unlikely customers would make commitments without confidence in their projects.
Still, supply remains a limiting factor. Breithaupt said Arista and its suppliers have made progress supporting the company’s 40% revenue guide, but supply is not unconstrained heading into next year. “If we get a bit more supply, we could even go a little higher than the guide,” she said.
Software and Scale-Across Expand AI Opportunity Brendan Gibbs, Arista’s vice president of product line management, said the company’s EOS network operating system remains central to its AI networking proposition. He characterized the software’s core value as providing “speed with quality,” helping customers deploy and operate AI clusters more quickly while providing analytics and visibility into cluster performance and GPU utilization.
Gibbs said software becomes increasingly important as customers extend AI deployments across geographically distributed data centers. In such scale-across architectures, customers must manage workload placement, congestion, packet loss, routing and encryption over longer distances.
Arista has identified scale-across as roughly one-third of its business under its most recent guidance, Gibbs said. He described the category as an expansion opportunity involving more ports, systems and software intelligence, rather than simply a need for a single routing or optical transport device.
The company said its existing position in large Ethernet-based scale-out AI clusters provides an advantage in pursuing scale-across deployments. Gibbs said scale-across is a natural extension for vendors that have already won the underlying AI cluster deployments.
Scale-Up Investments Target Longer-Term Market Arista is also investing in Ethernet-based scale-up networking, a market Gibbs said outside industry analysts have estimated could reach as much as $20 billion by 2030. Scale-up networking would connect processing units within a rack and support coherent memory across different XPUs, or accelerators.
Gibbs said Arista is helping define the Ethernet Scale-Up Networking, or ESAN, standard through the Open Compute Project. Breithaupt cautioned that scale-up will not be material to Arista’s 2027 financial results because standards work, pilots and trials remain ahead. The company expects the opportunity could become a new segment beginning in 2028.
The executives said they expect the scale-up market to include proprietary NVLink implementations, lower-feature white-box-equivalent offerings and branded, value-added Ethernet solutions. Arista does not intend to enter the white-box business, Breithaupt said, but sees an opportunity for customers that value a consistent EOS-based operating environment across scale-up, scale-out and scale-across deployments.
1.6T Plans, Margins and Campus Growth Gibbs said Arista is currently conducting 1.6T product trials with large customers and expects volume production next year. The company has announced both air-cooled and liquid-cooled options. Arista also introduced open co-packaged optics, or open CPO, and XPO, a liquid-cooled, pluggable 1.6T optical technology. Gibbs said XPO is generating customer discussions and product-planning activity but is not yet contributing to revenue or deferred revenue.
On profitability, Breithaupt said product mix remains the primary driver of gross margin. She said investors should assume a 62% to 64% gross-margin range unless the company provides different parameters. Price increases intended to offset higher component costs are designed to preserve margins rather than expand them, she said.
Breithaupt also said Arista expects deferred revenue to end the fourth quarter above its year-earlier level, although quarterly balances may fluctuate. She described deferred revenue as a complementary demand indicator that has been moving through the business within expected timelines.
Outside AI data center networking, Breithaupt highlighted momentum in campus networking. She said Arista is targeting a 5% market-share gain and expects campus revenue to rise from $800 million last year to $1.25 billion under its current guide, driven in part by greenfield customer wins.
About Arista Networks (NYSE:ANET)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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Should You Invest $1,000 in Arista Networks Right Now?Before you consider Arista Networks, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Arista Networks wasn't on the list.
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The AI boom is creating opportunities across semiconductors, cloud computing, enterprise software, infrastructure, cybersecurity, and automation.
Inside this report, you’ll find 10 companies positioned to benefit as artificial intelligence moves from hype to real-world deployment and becomes a core growth driver for corporate America.
Key Takeaways ANET is benefiting from AI infrastructure growth, with cumulative Etherlink customers now topping 100.Diverse accelerators and AI architectures are expanding ANET's addressable networking opportunity.ANET sees Scale-Across switching and routing TAM reaching $15-20B by 2030, expanding its AI opportunity. Arista Networks, Inc. (ANET - Free Report) is benefiting from the rapid expansion of AI data-center infrastructure. AI workloads require very large numbers of GPUs to communicate with each other at high speed. As AI clusters are becoming larger to cater to surging AI workloads, the networking infrastructure connecting these processors also needs to become faster and more reliable.
Arista’s comprehensive Etherlink AI fabric portfolio is gaining from these evolving trends. The company recently disclosed that the number of cumulative Etherlink customers has grown to more than 100 compared with only four or five customers in 2024. As AI infrastructure becomes more complex, customers increasingly need networking capabilities such as traffic engineering, low latency, reliability and security. These factors are driving demand for Arista’s EOS operating system.
ANET is expanding beyond a single accelerator ecosystem. The company currently uses a high percentage of NVIDIA GPUs. However, the company is exploring other options such as AMD's MI-series accelerators, Google's TPUs and various inference accelerators. Different accelerators and AI architectures can require different networking configurations. The growing diversity of AI accelerators and AI architectures is expanding Arista's addressable networking opportunity.
AI infrastructure is increasingly being distributed across multiple locations. Customers are facing constraints related to power, physical space and compute capacity. Arista’s 7800 platform is designed to support such distributed AI environments by providing high-capacity switching and routing capabilities. The company is expanding its portfolio to address issues at scale across networking architecture. The company estimates the Scale-Across switching and routing market could reach $15-$20 billion by 2030. The use case is expected to represent roughly 30% of its overall AI target of at least $3.6 billion in 2026.
How Are Competitors Faring?Arista faces competition from Cisco Systems (CSCO - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) in the AI networking space. Cisco closed fiscal 2026 with $9.3 billion in hyperscaler AI infrastructure orders, about 4.5 times fiscal 2025, and roughly $4 billion in related revenues. Management expects hyperscaler AI revenues to reach $7.5 billion in fiscal 2027. Cisco continues to expand AI data center offerings, including Nexus innovations to capture greater market share.
The acquisition of Juniper Networks is reshaping HPE’s mix by expanding its portfolio across campus and branch, data center switching, routing and security. In the second quarter of fiscal 2026, management highlighted that Juniper integration milestones and committed synergies are running ahead of schedule, and the combined go-to-market is already improving share of wallet with enterprise and service provider customers. HPE also launched new autonomous, agentic AI operations capabilities and raised its cumulative Networks for AI order target to at least $2 billion by the end of fiscal 2026, reflecting confidence in AI-driven demand for high-performance networking.
ANET’s Price Performance, Valuation & EstimatesShares of Arista have gained 43.4% over the past year against the industry’s decline of 13.9%.
Image Source: Zacks Investment Research
From a valuation standpoint, Arista trades at a forward price-to-sales ratio of 16.93, above the industry average of 8.75.
Image Source: Zacks Investment Research
Earnings estimates for 2026 have increased 11.29% to $4.04 over the past 60 days, while the same for 2027 has also increased 13.7% to $4.98.
Image Source: Zacks Investment Research
Arista currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Takeaways Semiconductors remain a smart-money favorite, with 48% of institutions adding exposure. CoreWeave, Arista Networks and Broadcom offer distinct ways to play AI infrastructure. Tiger Global's Intel bet highlights growing interest in contrarian semiconductor plays. Institutional investors appear to be taking a more selective approach to the stock market after building sizable positions in technology and AI-related names over the past few years.
The latest 13F filings show that money managers were not making aggressive moves in either direction during the second quarter. Instead, they appear to be trimming some crowded positions while adding to companies they believe can benefit from the next phase of the AI boom, per Reuters.
No Clear Verdict on Big Tech’s Future Course: Tap Via ETF?A Reuters analysis of 6,371 institutional investors found that nearly 44% reduced their holdings of the Magnificent Seven, while 42% increased or initiated positions. That near-even split suggests that there is no clear consensus on where mega-cap technology stocks go from here.
Still, some areas stood out. Semiconductors attracted stronger institutional buying, while several AI infrastructure companies continued to gain attention.
So, which stocks could investors consider when looking to follow the smart money?
Semiconductors Still Attract Institutional MoneyThe semiconductor sector was one of the strongest areas in the latest 13F data. About 48% of institutions were net buyers of major semiconductor stocks, compared with 34.5% that were net sellers. This is encouraging because semiconductor stocks have already enjoyed a major AI-driven rally.
iShares Semiconductor ETF (SOXX - Free Report) currently has a Zacks Rank #1 (Strong Buy). The ETF or the basket approach minimizes the company-specific concentration risks.
CoreWeave Rides the AI Infrastructure WaveCoreWeave CRWV is one of the more interesting AI infrastructure names to attract institutional interest. The company provides cloud infrastructure designed for demanding AI workloads, giving businesses access to powerful GPUs without having to build their own infrastructure from scratch.
However, CoreWeave is a more volatile bet than established technology giants. Hence, investors can play the CRWV-heavy ETFs like Roundhill Neocloud ETF NCLD and Themes Cybersecurity ETF SPAM.
Arista Networks: Smart Money Flow into AI NetworkingArista Networks (ANET - Free Report) emerged as an attractive position to institutional investors. The company provides high-speed networking solutions used by cloud and hyperscale data-center operators.
As AI clusters become larger, the need for faster and more efficient networking should increase as well. The stock is heavy on iShares U.S. Telecommunications ETF (IYZ - Free Report) .
Broadcom – Another AI BetBroadcom (AVGO - Free Report) provides another way to follow institutional money into AI. Broadcom has exposure across semiconductors and infrastructure software. Its custom AI accelerators and networking products are particularly important as hyperscalers expand their AI capabilities.
VanEck Fabless Semiconductor ETF SMHX and Strive U.S. Semiconductor ETF (SHOC - Free Report) are examples of two Broadcom-heavy chip ETFs.
Tiger Global Makes a Contrarian MoveInstitutional positioning wasn't uniformly bullish across the technology sector. Tiger Global Management, for example, reduced its stakes in several Magnificent Seven companies, including Microsoft (MSFT - Free Report) , Nvidia (NVDA - Free Report) and Meta Platforms (META - Free Report) , as quoted on Reuters.
But the hedge fund increased its position in Intel (INTC - Free Report) . The company has been working to rebuild its manufacturing capabilities and establish itself as a major foundry player. State Street SPDR NYSE Technology ETF (XNTK - Free Report) is an Intel-heavy fund.
Energy Isn't Getting the Same LoveInterestingly, energy stocks did not enjoy the same institutional enthusiasm.
About 40.3% of institutions were net sellers of a group of major energy companies compared with just 28% that were net buyers.
However, there were exceptions. OnyxPoint Global Management increased its exposure to energy names, including BP (BP - Free Report) and Devon Energy (DVN - Free Report) , per the same Reuters article.
Arista Networks, Inc. (ANET) Rosenblatt's 6th Annual Technology Summit: The Age of AI (Part II) August 18, 2026 3:00 PM EDT
Company Participants
Chantelle Breithaupt - Senior VP & CFO
Brendan Gibbs - Area Vice President of Product Line Management
Conference Call Participants
Michael Genovese - Rosenblatt Securities Inc., Research Division
Presentation
Michael Genovese
Rosenblatt Securities Inc., Research Division
Welcome to the Rosenblatt Age of AI Tech Conference, fireside chat with Arista Networks. I am Mike Genovese, the cloud and communications equipment analyst. Super happy to be joined by some of the management from one of the very best companies out there. We have the Chief Financial Officer, Chantelle Breithaupt; and Brendan Gibbs, Vice President of Product Line Management. Nice to see you both.
Chantelle Breithaupt
Senior VP & CFO
Yes. Thank you. Thanks for opportunity.
Michael Genovese
Rosenblatt Securities Inc., Research Division
Great. And so I'm going to ask questions. We've got 45 minutes, but I also want to let the audience know that on the audience screens, there's a widget in the upper right-hand corner, where you can type in questions that will come to me, and I will ask the team here any questions that I get from the audience. So please feel free to send them in.
Question-and-Answer Session
Michael Genovese
Rosenblatt Securities Inc., Research Division
But let's get started. So we're going to talk about AI, obviously. And Etherlink, which is the Arista's family of AI-optimized networking, high-performance platforms with advanced software has gone from only 4 or 5 customers in 2024 to more than 100 customers today. Can you kind of break that down more for us by customer type, whether cloud titans, AI labs, neoclouds, sovereign enterprise. And where is the incremental kind of AI fabric revenue coming from going forward versus the first half of the year?
BlackRock Inc. decreased its holdings in Arista Networks, Inc. (NYSE:ANET – Free Report) by 0.6% during the 2nd quarter, according to the company in its most recent filing with the SEC. The institutional investor owned 91,383,843 shares of the technology company’s stock after selling 523,799 shares during the quarter. BlackRock Inc. owned 7.26% of Arista Networks worth $15,524,287,000 at the end of the most recent quarter.
Other hedge funds and other institutional investors have also recently added to or reduced their stakes in the company. Norges Bank purchased a new position in Arista Networks during the 4th quarter worth $1,558,563,000. M&T Bank Corp raised its holdings in shares of Arista Networks by 3,182.7% in the fourth quarter. M&T Bank Corp now owns 4,012,373 shares of the technology company’s stock valued at $525,741,000 after purchasing an additional 3,890,146 shares during the last quarter. Franklin Resources Inc. raised its holdings in shares of Arista Networks by 59.3% in the fourth quarter. Franklin Resources Inc. now owns 7,878,360 shares of the technology company’s stock valued at $1,032,302,000 after purchasing an additional 2,934,098 shares during the last quarter. Massachusetts Financial Services Co. MA lifted its position in shares of Arista Networks by 34.6% during the second quarter. Massachusetts Financial Services Co. MA now owns 9,725,196 shares of the technology company’s stock valued at $1,712,788,000 after purchasing an additional 2,497,275 shares in the last quarter. Finally, Pictet Asset Management Holding SA lifted its position in shares of Arista Networks by 86.0% during the first quarter. Pictet Asset Management Holding SA now owns 4,240,951 shares of the technology company’s stock valued at $520,168,000 after purchasing an additional 1,960,829 shares in the last quarter. 82.47% of the stock is owned by institutional investors.
Insider Activity at Arista Networks In other Arista Networks news, major shareholder Andreas Bechtolsheim sold 300,000 shares of the business’s stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $203.30, for a total value of $60,990,000.00. Following the sale, the insider directly owned 181,143,048 shares in the company, valued at $36,826,381,658.40. The trade was a 0.17% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Jayshree Ullal sold 767,029 shares of the company’s stock in a transaction on Wednesday, August 5th. The shares were sold at an average price of $201.22, for a total value of $154,341,575.38. Following the transaction, the chief executive officer directly owned 16,387,981 shares in the company, valued at $3,297,589,536.82. This represents a 4.47% 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. In the last quarter, insiders sold 4,335,168 shares of company stock worth $798,637,629. 2.70% of the stock is owned by company insiders.
Analysts Set New Price Targets A number of brokerages have issued reports on ANET. TD Cowen upped their price objective on shares of Arista Networks from $210.00 to $250.00 and gave the stock a “buy” rating in a research report on Wednesday, August 5th. Jefferies Financial Group set a $250.00 target price on shares of Arista Networks in a research report on Wednesday, August 5th. UBS Group restated a “buy” rating and issued a $259.00 target price (up from $187.00) on shares of Arista Networks in a research note on Wednesday, August 5th. Bank of America reaffirmed a “buy” rating and issued a $240.00 target price (up from $200.00) on shares of Arista Networks in a report on Wednesday, August 5th. Finally, Zacks Research raised Arista Networks from a “hold” rating to a “strong-buy” rating in a research report on Monday, August 10th. Two investment analysts have rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating and one has assigned a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has an average rating of “Buy” and an average target price of $226.05. Read Our Latest Analysis on Arista Networks
Arista Networks Stock Performance NYSE ANET opened at $202.05 on Tuesday. The company has a market capitalization of $254.83 billion, a PE ratio of 63.74, a price-to-earnings-growth ratio of 2.06 and a beta of 1.60. Arista Networks, Inc. has a 52-week low of $114.52 and a 52-week high of $214.89. The company has a 50-day simple moving average of $175.00 and a 200 day simple moving average of $155.18.
Arista Networks (NYSE:ANET – Get Free Report) last released its earnings results on Tuesday, August 4th. The technology company reported $1.02 earnings per share for the quarter, beating analysts’ consensus estimates of $0.89 by $0.13. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The firm had revenue of $3.04 billion for the quarter, compared to analysts’ expectations of $2.83 billion. During the same period in the previous year, the company earned $0.73 earnings per share. The company’s quarterly revenue was up 37.7% on a year-over-year basis. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. As a group, analysts forecast that Arista Networks, Inc. will post 3.7 EPS for the current fiscal year.
(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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Bellars Harris Wealth Management LLC purchased a new position in Arista Networks, Inc. (NYSE:ANET – Free Report) during the second quarter, according to its most recent disclosure with the Securities and Exchange Commission. The fund purchased 32,869 shares of the technology company’s stock, valued at approximately $5,584,000.
Several other hedge funds and other institutional investors have also recently bought and sold shares of the stock. Lighthouse Financial Services Inc. ADV bought a new stake in shares of Arista Networks in the fourth quarter worth about $1,549,000. Bensler LLC bought a new stake in shares of Arista Networks in the 4th quarter worth approximately $6,350,000. QRG Capital Management Inc. increased its stake in shares of Arista Networks by 6.4% during the fourth quarter. QRG Capital Management Inc. now owns 169,613 shares of the technology company’s stock valued at $22,224,000 after buying an additional 10,217 shares during the period. Jefferies Financial Group Inc. increased its stake in shares of Arista Networks by 59.8% during the fourth quarter. Jefferies Financial Group Inc. now owns 17,621 shares of the technology company’s stock valued at $2,309,000 after buying an additional 6,591 shares during the period. Finally, Reaves W H & Co. Inc. bought a new position in shares of Arista Networks during the fourth quarter valued at approximately $3,058,000. Institutional investors own 82.47% of the company’s stock.
Arista Networks Stock Up 1.6% Shares of ANET stock opened at $202.05 on Tuesday. The business’s fifty day moving average is $175.00 and its 200 day moving average is $155.18. The stock has a market cap of $254.83 billion, a price-to-earnings ratio of 63.74, a PEG ratio of 2.06 and a beta of 1.60. Arista Networks, Inc. has a twelve month low of $114.52 and a twelve month high of $214.89.
Arista Networks (NYSE:ANET – Get Free Report) last announced its quarterly earnings data on Tuesday, August 4th. The technology company reported $1.02 EPS for the quarter, beating the consensus estimate of $0.89 by $0.13. Arista Networks had a return on equity of 30.65% and a net margin of 38.37%.The business had revenue of $3.04 billion during the quarter, compared to analyst estimates of $2.83 billion. During the same quarter last year, the firm posted $0.73 earnings per share. The company’s revenue for the quarter was up 37.7% on a year-over-year basis. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. Equities research analysts expect that Arista Networks, Inc. will post 3.7 earnings per share for the current fiscal year. Wall Street Analyst Weigh In A number of research analysts have issued reports on ANET shares. Citigroup reissued a “buy” rating on shares of Arista Networks in a research report on Thursday, August 6th. Truist Financial raised their target price on shares of Arista Networks from $175.00 to $234.00 and gave the stock a “buy” rating in a research report on Wednesday, August 5th. Weiss Ratings lowered shares of Arista Networks from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Wednesday, August 12th. Wolfe Research reiterated an “outperform” rating and set a $175.00 price target on shares of Arista Networks in a research report on Wednesday, June 10th. Finally, The Goldman Sachs Group reissued a “buy” rating and issued a $225.00 price target on shares of Arista Networks in a research note on Wednesday, August 5th. Two equities research analysts have rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and one has assigned a Hold rating to the company. According to MarketBeat, Arista Networks presently has a consensus rating of “Buy” and a consensus target price of $226.05.
View Our Latest Research Report on Arista Networks
Insider Activity In other Arista Networks news, CEO Jayshree Ullal sold 767,029 shares of the company’s stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $201.22, for a total value of $154,341,575.38. Following the sale, the chief executive officer owned 16,387,981 shares in the company, valued at approximately $3,297,589,536.82. This represents a 4.47% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 300,000 shares of the firm’s stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $203.30, for a total transaction of $60,990,000.00. Following the transaction, the insider directly owned 181,143,048 shares of the company’s stock, valued at $36,826,381,658.40. This represents a 0.17% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 4,335,168 shares of company stock valued at $798,637,629. 2.70% of the stock is owned by company insiders.
Arista Networks Company 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.
Read More Five stocks we like better than Arista Networks Commodities Are Booming, But These 3 ETFs Tell Different Stories 3 Active ETFs Making Big Moves in August This ETF Is Outperforming by Avoiding the S&P 500’s Biggest Problem Birkenstock Beats the Skeptics—But Not on EPS 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, Inc. (NYSE:ANET – Get Free Report) CEO Jayshree Ullal sold 573,509 shares of the business’s stock in a transaction on Wednesday, August 12th. The stock was sold at an average price of $208.13, for a total transaction of $119,364,428.17. Following the transaction, the chief executive officer owned 25,000 shares of the company’s stock, valued at approximately $5,203,250. The trade was a 95.82% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.
Jayshree Ullal also recently made the following trade(s):
On Wednesday, August 5th, Jayshree Ullal sold 331,434 shares of Arista Networks stock. The stock was sold at an average price of $201.22, for a total value of $66,691,149.48. On Wednesday, August 5th, Jayshree Ullal sold 1,032 shares of Arista Networks stock. The stock was sold at an average price of $201.24, for a total transaction of $207,679.68. On Wednesday, August 5th, Jayshree Ullal sold 767,029 shares of Arista Networks stock. The stock was sold at an average price of $201.22, for a total value of $154,341,575.38. On Friday, July 10th, Jayshree Ullal sold 234,578 shares of Arista Networks stock. The shares were sold at an average price of $187.18, for a total transaction of $43,908,310.04. On Thursday, July 9th, Jayshree Ullal sold 242,422 shares of Arista Networks stock. The shares were sold at an average price of $188.17, for a total transaction of $45,616,547.74. On Tuesday, May 26th, Jayshree Ullal sold 13,809 shares of Arista Networks stock. The stock was sold at an average price of $155.04, for a total value of $2,140,947.36. Arista Networks stock opened at $198.91 on Monday. Arista Networks, Inc. has a 52 week low of $114.52 and a 52 week high of $214.89. The firm’s 50-day simple moving average is $174.08 and its 200 day simple moving average is $154.79. The firm has a market capitalization of $250.87 billion, a PE ratio of 62.75, a P/E/G ratio of 2.06 and a beta of 1.60.
Arista Networks (NYSE:ANET – Get Free Report) last announced its earnings results on Tuesday, August 4th. The technology company reported $1.02 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.89 by $0.13. The company had revenue of $3.04 billion during the quarter, compared to analysts’ expectations of $2.83 billion. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The firm’s quarterly revenue was up 37.7% compared to the same quarter last year. During the same quarter in the previous year, the business posted $0.73 earnings per share. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. On average, research analysts expect that Arista Networks, Inc. will post 3.7 EPS for the current fiscal year. Institutional Investors Weigh In On Arista Networks Large investors have recently made changes to their positions in the business. Main Street Group LTD acquired a new position in shares of Arista Networks during the 1st quarter valued at $26,000. Sankala Group LLC purchased a new position in shares of Arista Networks in the fourth quarter valued at $27,000. Prosperity Bancshares Inc acquired a new stake in Arista Networks during the 4th quarter valued at $28,000. ABS Investment Management LLC purchased a new stake in Arista Networks during the 2nd quarter worth $29,000. Finally, Hilton Head Capital Partners LLC increased its stake in Arista Networks by 184.9% during the 1st quarter. Hilton Head Capital Partners LLC now owns 245 shares of the technology company’s stock worth $30,000 after buying an additional 159 shares during the period. Institutional investors and hedge funds own 82.47% of the company’s stock.
Arista Networks News Summary Here are the key news stories impacting Arista Networks this week:
Positive Sentiment: Arista remains a key beneficiary of expanding artificial-intelligence infrastructure spending. A comparison with Celestica highlights both companies’ growing roles in AI networking, computing and data-center buildouts. Arista’s latest quarter also showed strong momentum, with revenue rising 37.7% year over year and earnings exceeding analyst expectations. CLS vs. ANET: Which AI Stock Offers the Better Growth Opportunity? Positive Sentiment: CNBC commentator Jim Cramer continues to favor Arista and has described the company and CEO Jayshree Ullal as difficult competitors to bet against. The endorsement reinforces Arista’s reputation as a leading AI-networking investment, although it is sentiment-driven rather than a new fundamental catalyst. Jim Cramer Said Arista Networks, Inc. and Snowflake Inc. Were Worth It Neutral Sentiment: An options strategy discussed for ANET would generate income while capping upside at a price above the current level. The strategy reflects elevated investor interest and volatility but does not change Arista’s business outlook. Get Paid 18% a Year To Cap Your ANET Stock At 21% Higher Negative Sentiment: CEO Jayshree Ullal sold 573,509 shares worth approximately $119.4 million, reducing her direct ownership by 95.82% to 25,000 shares. The transaction was conducted under a pre-arranged Rule 10b5-1 plan, which reduces its significance as a discretionary bearish signal, but the size of the sale can still weigh on sentiment. SEC insider-trading filing Negative Sentiment: A valuation analysis argues that Arista’s shares are priced for peak profitability. With the stock trading at a historically elevated multiple and margins near the upper end of their range, investors may be concerned that future upside requires continued exceptional growth and profitability. Arista Networks Stock Is Priced For Its Peak Margin Analysts Set New Price Targets A number of equities analysts have recently weighed in on ANET shares. TD Cowen boosted their price objective on shares of Arista Networks from $210.00 to $250.00 and gave the company a “buy” rating in a research report on Wednesday, August 5th. Weiss Ratings lowered shares of Arista Networks from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Wednesday. Evercore reaffirmed an “outperform” rating on shares of Arista Networks in a research note on Wednesday, August 5th. Erste Group Bank upgraded Arista Networks from a “hold” rating to a “buy” rating in a report on Wednesday, July 15th. Finally, Jefferies Financial Group set a $250.00 price target on Arista Networks in a research note on Wednesday, August 5th. Two equities research analysts have rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and one has assigned a Hold rating to the company. Based on data from MarketBeat.com, the stock has an average rating of “Buy” and a consensus target price of $226.05.
View Our Latest Stock Report on Arista Networks
About Arista Networks (Get 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 August 17, 2026, we conducted a DCF analysis for Arista Networks Inc (ANET), a company that has shown impressive price performance over the past year. The st
As the artificial intelligence infrastructure boom matures, investors are weighing the rapid growth of Arista Networks (ANET -2.36%) against the turnaround efforts at Intel (INTC -1.97%) to see which is the better buy today.
Arista provides high-speed networking equipment essential for modern data centers, while Intel remains a giant in semiconductor manufacturing and design. While Arista benefits from the shifting cloud landscape, Intel is currently restructuring its business to focus on its foundry services. They represent two very different paths within the technology sector for those looking to capitalize on hardware demand.
The case for Arista NetworksArista sells data-driven networking platforms for cloud environments and artificial intelligence clusters. The company focuses on its Extensible Operating System, which provides a unified software stack for its high-performance hardware. Customer concentration like this adds a layer of risk to the business, as two major buyers accounted for roughly 16% and 26% of revenue in 2025.
In FY 2025, revenue reached nearly $9.0 billion, representing growth of approximately 28.6% compared to the prior year. Net income for the period was roughly $3.5 billion, resulting in a net margin of close to 39%, which measures the portion of sales remaining as profit. This growth reflects strong demand for high-speed switching among semiconductor stocks and cloud infrastructure providers.
On its December 2025 balance sheet, the company reported a debt-to-equity ratio of 0.0x, indicating it carries no debt relative to shareholder equity. The current ratio, which measures the ability to cover short-term liabilities with short-term assets, stands at approximately 3.0x. Arista generated free cash flow of about $4.3 billion during the year, representing the cash remaining after the business pays for its operations and equipment.
The case for IntelIntel designs and manufactures computing technologies for PCs, data centers, and advanced manufacturing through its foundry segment. The company serves a wide range of original equipment manufacturers and cloud service providers. Currently, Intel is involved in legal proceedings regarding an agreement that gave the U.S. government a 10% equity stake in the firm.
In FY 2025, revenue was nearly $52.9 billion, a slight decrease of approximately 0.5% from the previous year. The company reported a net loss of roughly $267.0 million for the period, equating to a negative net margin of about 0.5%. This follows a period of heavy investment and restructuring as the company attempts to regain its footing in the global manufacturing market.
As of its December 2025 balance sheet, the debt-to-equity ratio of 0.4x means it carries $0.40 in debt for every dollar of shareholder equity. The current ratio of nearly 2.0x shows the company can cover short-term debts twice over with current assets. Note that stock-based compensation represented roughly 25.1% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement. Free cash flow was negative, totaling approximately -$4.9 billion.
Risk profile comparisonArista faces risks from its heavy dependence on a small number of large customers who can change their spending patterns quickly. The company also relies significantly on Broadcom for the switching chips used in its hardware. Any geopolitical tension affecting manufacturing in Malaysia or Vietnam could disrupt its supply chain, while competition from Cisco Systems remains persistent.
Intel is currently navigating regulatory and litigation risks, including shareholder lawsuits related to its corporate governance. The semiconductor industry remains highly cyclical, and Intel must contend with fluctuating demand from major technology clients such as Microsoft and Amazon. Furthermore, the company faces intense competition as it tries to scale its foundry business against established global leaders.
Valuation comparisonIntel trades at a much lower P/S ratio than Arista, though its Forward P/E is higher due to future earnings estimates.
MetricArista NetworksIntelForward P/E46.9x68.4xP/S ratio26.4x9.7xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
The question with Intel isn't whether the stock is cheap on a sales basis, it's whether the turnaround actually shows up in earnings before the market's patience runs out. The bull case rests on the Intel 18A node ramping successfully, a meaningful external foundry customer signing on for 14A, and margins recovering from a loss-making 2025 back toward profitability, all while the U.S. government sits on a large equity stake and litigation over that arrangement plays out in Delaware court. None of that is resolved yet, and the stock's climbing forward P/E suggests investors are already pricing in more of that recovery than the current earnings base supports. Arista's customer concentration gets flagged every time this stock comes up, and it's a legitimate risk on paper, but the company has weathered it for years without the buying patterns of its largest customers actually derailing growth. That track record doesn't erase the risk, but it does mean the market has had ample opportunity to punish Arista for it and hasn't. Intel's risks, by contrast, are still playing out in real time, with no comparable history of the company successfully navigating them. For investors drawn to Intel's low price-to-sales ratio, the honest read is that it's a call option on a turnaround succeeding, not a value stock in the traditional sense. I'd buy Arista here. It's not cheap, but you're paying for a business that's already delivering, not one still trying to prove the thesis works.
As artificial intelligence demand continues to reshape the enterprise landscape, choosing between hardware and software becomes critical. Should you invest in Arista Networks (ANET -2.36%) or AppLovin (APP +0.89%) for your portfolio today?
Arista Networks provides the essential high-speed networking equipment that powers modern data centers, while AppLovin offers an AI-driven platform for mobile app advertising and monetization. Both companies are profiting from the massive expansion of digital infrastructure and automation, making them top candidates for investors looking to capitalize on high-growth technology trends in 2026.
The case for Arista NetworksArista Networks provides high-performance networking solutions for companies among tech stocks, specifically focusing on massive data centers. The company has a significant revenue concentration with two end customers, which represented 16% and 26% of total revenue in 2025, respectively. Customer concentration like this adds a layer of risk to the business, as it depends heavily on capital spending from a few major tech firms.
In FY 2025, revenue reached nearly $9.0 billion, which represents a 28.6% increase over the previous year. The company reported net income of approximately $3.5 billion for the same period. This resulted in a net margin of 39%, reflecting the company's ability to turn a high portion of sales into actual profit.
As of its December 2025 balance sheet, the current ratio is nearly 3.0x, indicating the company has three dollars in assets for every dollar of liabilities due within a year. Arista also holds a debt-to-equity ratio of 0.0x, which means it carries no debt relative to its shareholder equity. It generated nearly $4.3 billion in free cash flow, representing the cash remaining after the business pays for operations and equipment.
The case for AppLovinAppLovin operates an advertising platform that helps developers grow and monetize their apps using advanced artificial intelligence tools. In June 2025, the company completed the sale of its internal apps business to focus entirely on its software and advertising platform. It serves a global market of advertisers, including mobile gaming firms and consumer brands seeking to optimize their digital spending.
In FY 2025, revenue reached approximately $5.5 billion, marking a significant 70% growth rate compared to the prior fiscal year. This growth helped the company achieve a net income of nearly $3.3 billion and a net margin of 60.8%. These figures highlight the massive scale the company has reached since the launch of its Axon AI engine.
As of the December 2025 balance sheet, the current ratio is nearly 3.3x, suggesting the company maintains a strong buffer to cover short-term obligations. The debt-to-equity ratio of 1.7x indicates that total liabilities exceed shareholder equity. AppLovin generated nearly $3.9 billion in free cash flow, which is the cash left over after supporting its platform operations and infrastructure.
Risk profile comparisonArista Networks faces significant revenue concentration, as a few cloud titans dictate its financial success through their capital expenditure priorities. The company relies heavily on Broadcom for essential switching chips, creating a supply chain vulnerability. Furthermore, it must compete against Cisco and low-cost hardware providers while keeping pace with rapid technological shifts in AI networking.
AppLovin is highly dependent on third-party mobile platforms like Apple and Alphabet, which can change privacy policies at any time. The company faces intense competition from Meta Platforms, Amazon, and Unity for advertising dollars and data capabilities. Additionally, evolving global privacy laws pose ongoing compliance risks that could impact how the company targets users with ads.
Valuation comparisonAppLovin currently carries a lower Forward P/E and P/S ratio than Arista Networks. These metrics compare the stock price to future earnings estimates and annual sales.
MetricArista NetworksAppLovinForward P/E46.9x21.7xP/S ratio26.4x21.3xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
I'd go with Arista Networks, and after its most recent quarter, this stock is deserving of your attention. The company just posted its first-ever $3 billion quarter and raised its full-year outlook for the third time this year. Demand for its AI-specific networking products has gone from a trickle to a flood, with the customer count crossing one hundred in under two years. Operating margins are expanding even as revenue grows at a pace that keeps surprising analysts to the upside.
AppLovin's AI-powered advertising platform is one of the more profitable software businesses being built right now, and the long-term vision of expanding beyond mobile gaming into e-commerce and other verticals is worth taking seriously. But the Q2 revenue miss and below-consensus guidance introduced uncertainty at a moment when the stock was already under significant pressure.
Supply chain headwinds are something Arista is managing carefully, but every major metric is pointing in the right direction. For a long-term investor, Arista's position at the center of the AI networking build-out, with the results to back it up, makes it the stronger pick right now.
Arista Networks (NYSE:ANET – Get Free Report) and Vecima Networks (OTCMKTS:VNWTF – Get Free Report) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.
Valuation & Earnings This table compares Arista Networks and Vecima Networks”s revenue, earnings per share (EPS) and valuation.
Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Arista Networks $9.01 billion 28.58 $3.51 billion $3.17 64.38 Vecima Networks N/A N/A N/A $1.04 9.07 Arista Networks has higher revenue and earnings than Vecima Networks. Vecima Networks is trading at a lower price-to-earnings ratio than Arista Networks, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership 82.5% of Arista Networks shares are owned by institutional investors. Comparatively, 0.3% of Vecima Networks shares are owned by institutional investors. 2.7% of Arista Networks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability This table compares Arista Networks and Vecima Networks’ net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets Arista Networks 38.37% 30.65% 19.44% Vecima Networks N/A N/A N/A Analyst Ratings This is a summary of recent ratings and recommmendations for Arista Networks and Vecima Networks, as provided by MarketBeat.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Arista Networks 0 0 23 2 3.08 Vecima Networks 0 0 1 0 3.00 Arista Networks currently has a consensus price target of $226.05, indicating a potential upside of 10.75%. Given Arista Networks’ stronger consensus rating and higher possible upside, research analysts clearly believe Arista Networks is more favorable than Vecima Networks.
Summary Arista Networks beats Vecima Networks on 12 of the 12 factors compared between the two stocks.
About Arista Networks (Get Free Report)
Arista Networks, Inc. engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Its cloud networking solutions consist of Extensible Operating System (EOS), a publish-subscribe state-sharing networking operating system offered in combination with a set of network applications. The company offers data center and cloud networking systems, including newer artificial intelligence (AI) ethernet switching platforms; campus wired and wireless products, and routing systems addressing Core Routing, Edge Routing, Data Center Interconnect (DCI), Multi-cloud and Wide Area Networking (WAN) use cases; and a suite of value-add software solutions that leverage EOS to provide end-to-end orchestration, automation, analytics, network monitoring, and security. It also provides post contract customer support services, such as technical support, hardware repair and replacement parts beyond standard warranty, bug fixes, patches, and upgrade services. The company serves a range of industries comprising internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, telecommunication service providers, and others. It markets and sells its products through distributors, system integrators, value-added resellers, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.
About Vecima Networks (Get Free Report)
Vecima Networks Inc. engages in the development of integrated hardware and software solutions for broadband access, content delivery, and telematics. The company operates through three segments: Video and Broadband Solutions, Content Delivery and Storage, and Telematics. The Video and Broadband Solutions segment offers platforms that process data from the cable network and deliver high-speed internet connectivity to homes over cable and fiber, as well as adapt video services. Its principal products include Terrace and TerraceQAM, which are designed to meet the needs of the business services verticals, such as multi- dwelling unit, hotels, motels, and resorts; and Entra distributed access architecture platform comprising EntraPHY, EntraMAC, EntraOptical, EntraControl, and EntraVideo that addresses the network migration to a distributed access architecture. The Content Delivery and Storage segment offers solutions and software for service providers and content owners that focus on ingesting, producing, storing, delivering, and streaming video for live linear, video on demand, network digital video recorder, and time-shifted services over the internet under the MediaScale brand. The Telematics segment provides information and analytics for fleet managers to manage their mobile and fixed assets under the Contigo and Nero Global Tracking brands. The company also offers optical access nodes, Terrace QAM, Terrace TC600E, Terrace IQ, Entra FPXT-B, Enra access code, Entra access controller, Entra access switch, Entra Remote PHY Monitor, Entra Video QAM Manager, MediaScale Origin, MediaScale storage, and MediaScale transcode. In addition, it provides engineering and consultation services; lifecycle program management; installation and commission; training and certification; workforce optimization; and operations and customer support services. The company was incorporated in 1988 and is headquartered in Victoria, Canada. Vecima Networks Inc. is a subsidiary of 684739 B.C. Ltd.
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Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Arista Networks (ANET - Free Report) .
Arista Networks currently has an average brokerage recommendation (ABR) of 1.10, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 25 brokerage firms. An ABR of 1.10 approximates between Strong Buy and Buy.
Of the 25 recommendations that derive the current ABR, 22 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 88% and 12% of all recommendations.
Brokerage Recommendation Trends for ANET
Check price target & stock forecast for Arista Networks here>>>
While the ABR calls for buying Arista Networks, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is ANET Worth Investing In?In terms of earnings estimate revisions for Arista Networks, the Zacks Consensus Estimate for the current year has increased 13.1% over the past month to $4.04.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Arista Networks. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Arista Networks may serve as a useful guide for investors.
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Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "long context," investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Arista Networks (ANET - Free Report) , a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Arista Networks currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?Let's discuss some of the components of the Momentum Style Score for ANET that show why this cloud networking company shows promise as a solid momentum pick.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For ANET, shares are up 4.61% over the past week while the Zacks Internet - Software industry is up 4.29% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 5.72% compares favorably with the industry's 1.16% performance as well.
While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics -- such as performance over the past three months or year -- can be useful as well. Shares of Arista Networks have increased 35.15% over the past quarter, and have gained 39.13% in the last year. In comparison, the S&P 500 has only moved 5.1% and 22.6%, respectively.
Investors should also take note of ANET's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now ANET is averaging 7,902,349 shares for the last 20 days..
Earnings OutlookThe Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with ANET.
Over the past two months, 11 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost ANET's consensus estimate, increasing from $3.63 to $4.04 in the past 60 days. Looking at the next fiscal year, 10 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom LineTaking into account all of these elements, it should come as no surprise that ANET is a #1 (Strong Buy) stock with a Momentum Score of A. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Arista Networks on your short list.
Arista Networks, Inc. (NYSE:ANET – Get Free Report) major shareholder Andreas Bechtolsheim sold 111,848 shares of the stock in a transaction on Thursday, August 6th. The stock was sold at an average price of $192.75, for a total value of $21,558,702.00. Following the transaction, the insider owned 109,833 shares of the company’s stock, valued at approximately $21,170,310.75. This represents a 50.45% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Large shareholders that own more than 10% of a company’s stock are required to disclose their transactions with the SEC.
Andreas Bechtolsheim also recently made the following trade(s):
On Wednesday, August 5th, Andreas Bechtolsheim sold 300,000 shares of Arista Networks stock. The shares were sold at an average price of $203.30, for a total transaction of $60,990,000.00. On Thursday, July 2nd, Andreas Bechtolsheim sold 240,000 shares of Arista Networks stock. The shares were sold at an average price of $162.67, for a total transaction of $39,040,800.00. On Wednesday, July 1st, Andreas Bechtolsheim sold 260,000 shares of Arista Networks stock. The shares were sold at an average price of $164.22, for a total transaction of $42,697,200.00. On Monday, June 15th, Andreas Bechtolsheim sold 260,000 shares of Arista Networks stock. The shares were sold at an average price of $165.57, for a total value of $43,048,200.00. On Friday, June 5th, Andreas Bechtolsheim sold 220,000 shares of Arista Networks stock. The stock was sold at an average price of $157.93, for a total value of $34,744,600.00. On Thursday, June 4th, Andreas Bechtolsheim sold 240,000 shares of Arista Networks stock. The shares were sold at an average price of $163.06, for a total value of $39,134,400.00. On Tuesday, May 26th, Andreas Bechtolsheim sold 220,000 shares of Arista Networks stock. The stock was sold at an average price of $156.86, for a total transaction of $34,509,200.00. On Friday, May 22nd, Andreas Bechtolsheim sold 205,000 shares of Arista Networks stock. The stock was sold at an average price of $151.74, for a total transaction of $31,106,700.00. Arista Networks Stock Performance NYSE ANET opened at $191.09 on Tuesday. The firm has a 50 day simple moving average of $171.30 and a 200-day simple moving average of $152.93. Arista Networks, Inc. has a one year low of $114.52 and a one year high of $214.89. The firm has a market cap of $241.01 billion, a price-to-earnings ratio of 60.28, a PEG ratio of 2.17 and a beta of 1.60.
Arista Networks (NYSE:ANET – Get Free Report) last announced its earnings results on Tuesday, August 4th. The technology company reported $1.02 earnings per share for the quarter, topping the consensus estimate of $0.89 by $0.13. The firm had revenue of $3.04 billion for the quarter, compared to the consensus estimate of $2.83 billion. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The firm’s revenue for the quarter was up 37.7% on a year-over-year basis. During the same period in the prior year, the firm earned $0.73 EPS. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. Equities analysts predict that Arista Networks, Inc. will post 3.33 EPS for the current fiscal year.
Hedge Funds Weigh In On Arista Networks Several large investors have recently bought and sold shares of ANET. Cura Wealth Advisors LLC lifted its holdings in Arista Networks by 3.1% during the 2nd quarter. Cura Wealth Advisors LLC now owns 1,748 shares of the technology company’s stock worth $297,000 after buying an additional 52 shares during the period. Intrua Financial LLC raised its position in shares of Arista Networks by 2.7% during the first quarter. Intrua Financial LLC now owns 2,307 shares of the technology company’s stock worth $283,000 after acquiring an additional 61 shares during the last quarter. Shepherd Financial Partners LLC raised its position in shares of Arista Networks by 1.2% during the second quarter. Shepherd Financial Partners LLC now owns 5,403 shares of the technology company’s stock worth $918,000 after acquiring an additional 66 shares during the last quarter. NBT Bank N A NY lifted its stake in shares of 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. Finally, Hoxton Planning & Management LLC boosted its holdings in Arista Networks by 4.1% in the first quarter. Hoxton Planning & Management LLC now owns 1,744 shares of the technology company’s stock valued at $214,000 after acquiring an additional 68 shares during the last quarter. Hedge funds and other institutional investors own 82.47% of the company’s stock.
Analyst Upgrades and Downgrades ANET has been the topic of several analyst reports. Evercore reiterated an “outperform” rating on shares of Arista Networks in a research note on Wednesday, August 5th. UBS Group restated a “buy” rating and set a $259.00 price target (up from $187.00) on shares of Arista Networks in a report on Wednesday, August 5th. Deutsche Bank Aktiengesellschaft upgraded Arista Networks to a “buy” rating in a report on Wednesday, June 10th. Piper Sandler reiterated an “overweight” rating and issued a $240.00 price objective (up from $181.00) on shares of Arista Networks in a research note on Wednesday, August 5th. Finally, Rosenblatt Securities boosted their price objective on Arista Networks from $210.00 to $280.00 and gave the stock a “buy” rating in a research report on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-three have issued a Buy rating and one has assigned a Hold rating to the company. According to MarketBeat.com, the stock has an average rating of “Buy” and a consensus price target of $226.05.
Check Out Our Latest Report on ANET
Key Headlines Impacting Arista Networks Here are the key news stories impacting Arista Networks this week:
Positive Sentiment: Record results reinforce the AI networking growth story. Arista reported its first quarterly revenue above $3 billion, with revenue of $3.036 billion, up 37.7% year over year and 12.1% sequentially. The company also exceeded consensus expectations for earnings and revenue, supporting optimism around hyperscaler and AI data-center spending. Arista’s Record Quarter Reignites The AI Networking Debate Positive Sentiment: Analyst estimates are moving higher. Strong second-quarter growth, demand for AI and cloud infrastructure, and the company’s “Arista 2.0” strategy are driving upward earnings revisions. The average analyst price target implies additional upside, although price targets are not always reliable indicators. Arista Witnesses an Uptrend in Estimate Revision Positive Sentiment: Growth comparisons remain favorable. Arista has delivered sequential revenue growth for eight consecutive quarters, contrasting with a more uneven trajectory at Arm. This consistency strengthens the case that ANET is benefiting from a durable AI infrastructure spending cycle. Arista Networks vs. Arm Neutral Sentiment: Valuation remains a key debate. Supporters argue that sustained earnings beats and hyperscaler capital spending justify ANET’s premium valuation. Other analysts contend that much of the AI opportunity is already reflected in the stock and that future gains may be more limited. Strong Quarterly Earnings Keeps The Buy Thesis Intact Negative Sentiment: Major shareholder Andreas Bechtolsheim sold 111,848 shares worth approximately $21.6 million. The transaction reduced his ownership by about 50%. However, it was executed under a pre-arranged Rule 10b5-1 trading plan, which lessens its significance as a signal about management’s outlook. SEC Insider Transaction Filing Negative Sentiment: Potential margin pressure and valuation risks remain. Memory shortages could weigh on margins, while concerns about one-time sales and the stock’s elevated multiples may limit upside even as AI demand stays strong. Arista Networks Downgrade About Arista Networks (Get 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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Multi-year AI capex boom, growing ASIC market size, along with expanded Ethernet TAM across 1.6/3.2 Tbps and scale-up/out/across underpin ANET's robust growth prospects. This is aided by META/MSFT comprising 42% of its FY2025 revenue and potentially GOOG from FY2026 onwards, with the growing compute backlog sustaining the aggressive AI capex trends. ANET's melt-up has triggered the expensive P/E of 46.75x and 3Y PEG of 1.63x, while pulling forward part of its upside potential to my LTPT of $211.
Key Takeaways Arista's 2026 and 2027 earnings estimates rose 2.2% and 3%, respectively, over the past seven days.Arista's Q2 revenues jumped 37.7% year over year, driven by AI, cloud and enterprise demand.ANET's Arista 2.0 strategy targets core innovation, SaaS expansion and entry into adjacent markets. Earnings estimates for Arista Networks, Inc. (ANET - Free Report) for 2026 and 2027 have moved up 2.2% to $3.72 and 3% to $4.52, respectively, over the past seven days. The positive estimate revisions depict bullish sentiments about the stock’s growth potential.
Image Source: Zacks Investment Research
Solid Q2 Results Buoy ANETArista reported strong second-quarter 2026 results with both adjusted earnings and revenues beating the Zacks Consensus Estimate. The company posted a strong 37.7% year-over-year revenue increase, reflecting broad-based growth across its artificial intelligence (AI), cloud and enterprise networking businesses, supported by healthy customer demand and improved product availability.
On a non-GAAP basis, net income improved to $1.3 billion or $1.02 per share from $934.2 million or 73 cents per share in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate of 89 cents. Quarterly revenues increased to $3.04 billion from $2.2 billion in the prior-year quarter, mainly due to solid growth in both Product and Service segments. The top line beat the consensus estimate of $2.83 billion.
Image Source: Zacks Investment Research
Arista 2.0 Strategy Lends SupportThe company is gaining healthy momentum as the Arista 2.0 strategy is resonating well with customers. The strategy comprises three components that are likely to drive growth over the next few years. The first involves plans to invest in core businesses by rolling out new solutions and improved AI offerings. Secondly, Arista aims to emphasize software-as-a-service for improved revenue visibility. Last but not least, the company plans to enter adjacent markets to target a broader customer base.
Arista is witnessing solid demand trends among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack. The versatility of its unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from other competitors in the industry. This has translated into solid revenue growth for the company over the years.
The company offers one of the broadest product lines of data center and campus Ethernet switches and routers in the industry. It provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency. The company also innovates in areas such as deep packet buffers, embedded optics and reversible cooling. Arista 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 high-performance switching products.
CloudEOS Edge: ANET’s X-Factor?Arista continues to benefit from the expanding cloud networking market, which is driven by a strong demand for scalable infrastructure. As more business enterprises transition to the cloud, the company is poised for growth in the data-driven cloud networking business with proactive platforms and predictive operations. In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance and programmability, enabling integration with third-party applications for network management, automation and orchestration.
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 for video conferencing applications such as Microsoft Teams and Zoom. This highly scalable, software-driven routing solution enables seamless connectivity between enterprise IT infrastructure, public cloud networks and service provider edges. It extends Arista’s core EOS capabilities beyond traditional data centers to multi-cloud environments, metro-edge deployments and 5G network boundaries.
Price PerformanceArista has surged 37.1% over the past year against the industry’s decline of 13.6%. It has, however, lagged peers like Hewlett Packard Enterprise Company (HPE - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) . While Cisco has gained 71.8%, Hewlett Packard is up 158.5% over this period.
One-Year ANET Stock Price Performance
Image Source: Zacks Investment Research
End NoteWith healthy revenue-generating potential driven by steady demand trends, Arista appears poised for solid growth momentum. A strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. An uptrend in estimate revision further portrays positive investor sentiments.
The stock delivered a trailing four-quarter average earnings surprise of 8.9%. Arista currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed for further price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock.
Arista Networks (ANET - Free Report) closed the last trading session at $188.67, gaining 0.9% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $238.34 indicates a 26.3% upside potential.
The average comprises 24 short-term price targets ranging from a low of $179.15 to a high of $289.00, with a standard deviation of $27.19. While the lowest estimate indicates a decline of 5.1% from the current price level, the most optimistic estimate points to a 53.2% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.
However, an impressive consensus price target is not the only factor that indicates a potential upside in ANET. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Here's Why There Could be Plenty of Upside Left in ANETAnalysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason to expect an upside in the stock. That's because empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 1.8%, as four estimates have moved higher compared to no negative revision.
Moreover, ANET currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much ANET could gain, the direction of price movement it implies does appear to be a good guide.
One company powers the world's creative output, while the other builds the high-speed digital highways that make modern artificial intelligence possible. Choosing between Adobe (ADBE +1.91%) and Arista Networks (ANET -1.90%) means weighing software stability against infrastructure growth.
Adobe provides the essential software suite for digital creators, while Arista dominates the high-performance networking equipment market for data centers. Both companies are pivotal to the artificial intelligence revolution, though they play very different roles. Investors can compare them to decide whether to prioritize established software platforms or the hardware infrastructure powering the cloud.
The case for AdobeAdobe is a titan among tech stocks, providing essential tools for digital creation, document management, and marketing analytics. Its recent acquisitions of Semrush and Topaz Labs aim to boost AI-driven content marketing and image enhancement capabilities. These strategic moves help the company serve a massive base of 50 million Behance community members and global enterprise clients.
In its 2025 fiscal year (FY), revenue reached $23.8 billion, representing 10.5% growth over the previous year. The company reported net income of $7.1 billion for the same period. This resulted in a net margin of 30%, which measures the portion of revenue that remains as profit after all expenses are paid.
As of its November 2025 balance sheet, the debt-to-equity ratio was 0.6x. This metric shows the relationship between total debt and shareholder equity, indicating a manageable level of leverage. The current ratio of 1.0x shows the company can meet its immediate financial obligations, while free cash flow reached $9.9 billion for the year, which is the cash a business has left after paying for operating costs and equipment.
The case for Arista NetworksArista Networks focuses on data-driven networking for data center environments. The company maintains a high concentration of revenue from a limited number of cloud giants. Customer concentration like this adds a layer of risk to the business, as the loss of one major partner could significantly impact total sales.
For FY 2025, the company generated $9.0 billion in revenue, reflecting a 28.6% increase compared to the prior year. Net income for the fiscal year was $3.5 billion. Arista maintained a net margin of 39%, showing its ability to convert a high percentage of sales into profit after covering all operating costs.
According to its December 2025 balance sheet, Arista has a debt-to-equity ratio of zero. This suggests the company operates without any debt relative to its shareholder equity. It holds a current ratio of 3.0x and produced $4.3 billion in free cash flow.
Risk profile comparisonAdobe faces intense competition from AI-native companies that may offer faster or cheaper creative tools. It also deals with regulatory uncertainty regarding how AI models are trained and whether they infringe on intellectual property. Additionally, the company relies on large enterprise contracts that involve long and complex sales cycles, particularly for its AI-integrated solutions.
Arista is heavily dependent on a small group of massive customers like Microsoft. It also relies on Broadcom for essential chips, creating a risk if supply chains are disrupted or pricing fluctuates. Finally, it faces competition from established giants like Cisco, which could put downward pressure on its pricing power and profit margins.
Valuation comparisonAdobe appears to be the more conservative choice based on its Forward P/E, which measures price against future earnings estimates, while Arista trades at a higher P/S ratio.
MetricAdobeArista NetworksForward P/E10.7x47.8xP/S ratio4.4x26.9xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Weighing whether to buy shares in software giant Adobe or AI hardware provider Arista Networks is not a straightforward decision. While Adobe stock boasts a superior valuation, given the lower forward P/E and P/S ratios, CEO Shantanu Narayen is seeking to step down once a successor is found. This injects uncertainty into whether new management can extend the company’s streak of sales growth.
Adobe posted record revenue of $6.6 billion in its fiscal second quarter ended May 29. Its diluted earnings per share (EPS) also grew to $4.25 compared to $3.94 in the previous year. This demonstrates its solutions continue to capture customer spending, and it remains a highly profitable company.
Arista Networks is also doing well as it delivered its first quarter of $3 billion in sales during Q2. Its Q2 diluted EPS increased to $0.95 compared to $0.70 in 2025.
Arista Networks has the tailwind of AI data center expansion to help it deliver ongoing revenue growth, but my choice to invest in is Adobe. That’s because of its market leadership position in digital design tools, excellent sales and profits, and low valuation, which gives it a greater opportunity for share price appreciation.
Robert Izquierdo has positions in Adobe, Arista Networks, Broadcom, Cisco Systems, and Microsoft. The Motley Fool has positions in and recommends Adobe, Arista Networks, Broadcom, Cisco Systems, and Microsoft. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
Arista Networks continues to deliver robust earnings, consistently beating expectations by 10-15% and justifying its premium valuation. ANET benefits directly from hyperscaler capex supercycle, with cloud giants' spending driving strong revenue and earnings growth through at least 2027. Despite a 40x headline P/E, ANET's PEG ratio is mid-range, and true forward multiples may be closer to 35x given persistent outperformance.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.
SummaryArista Networks, Inc. delivered another strong quarter, beating revenue by 7.5% and EPS by 15%.ANET is a prime beneficiary of the ongoing AI-driven capital expenditure surge among hyperscalers.Despite consistent outperformance, ANET stock trades at ~50x forward earnings, reflecting high expectations for future growth.I remain neutral on ANET, as exceptional results and growth are already priced into the stock's current valuation.Looking for a helping hand in the market? Members of Cash Flow Club get exclusive ideas and guidance to navigate any climate. Learn More » Sundry Photography/iStock Editorial via Getty Images
Article Thesis Arista Networks, Inc. (ANET) reported strong results for its fiscal second quarter. The company is a big beneficiary of the ongoing AI capital expenditures boom, and as long as hyperscalers
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of AVGO, MSFT 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.
Key Takeaways ANET topped 100 cumulative AI fabric customers and expects at least $3.6B in AI revenue in 2026. Arista Networks reported record Q2 2026 revenue of $3.04B and non-GAAP EPS of $1.02. ANET is expanding beyond cloud switching through enterprise networking, routing and software offerings. Arista Networks (ANET - Free Report) has surged 30.1% over the past three months, reflecting growing investor confidence in the company's expanding role in AI networking. The rally has been supported by another quarter of stronger-than-expected financial results, accelerating AI infrastructure demand and continued expansion beyond its traditional cloud switching business. The key question for investors is whether these fundamentals can continue supporting further gains or whether much of the optimism has already been priced into the stock.
What Is Fueling ANET's AI Networking Story?AI networking remains Arista's biggest growth driver. Management said AI fabric momentum has expanded dramatically, with cumulative AI fabric customers surpassing 100 compared with only four to five customers in 2024. The company expects AI-related revenue to reach at least $3.6 billion in 2026 as hyperscalers and enterprises continue building large-scale AI clusters.
To strengthen its position, Arista recently introduced new Etherlink AI fabric platforms featuring 1.6-terabit technology, including liquid-cooled options designed for next-generation AI deployments. The company also highlighted innovations such as Multipath Reliable Connection (MRC), Smart System Upgrade (SSU) and Segment Routing over IPv6 (SRv6), which improve utilization, resiliency and efficiency across AI clusters. These capabilities expand Arista's opportunity beyond traditional scale-out networking into scale-across AI architectures, a market management believes could represent a $15-$20 billion opportunity by 2030.
How Arista Is Expanding Beyond Cloud SwitchingAlthough AI has attracted most investor attention, Arista continues diversifying its business across enterprise networking. The company has steadily expanded into campus networking, routing, cloud automation and software through its Extensible Operating System (EOS) and CloudVision platform. EOS remains a major competitive differentiator because it provides a unified, programmable operating system spanning data centers, campus networks and AI infrastructure. This software-centric architecture simplifies network management while supporting automation, security and scalability across customer environments.
Arista also competes with networking leader Cisco Systems, Inc. (CSCO - Free Report) and NVIDIA Corporation (NVDA - Free Report) in AI networking. Cisco is expanding its AI infrastructure offerings through its enterprise networking portfolio, while NVIDIA continues to strengthen its AI networking business with high-performance Ethernet and InfiniBand technologies. Arista has differentiated itself through its software-driven EOS architecture, growing AI Ethernet leadership and increasing exposure to hyperscale AI deployments, positioning the company well in the rapidly expanding AI networking market.
The strategy is producing broader adoption outside hyperscale cloud customers. During the quarter, Arista highlighted recognition as a Leader in Gartner's 2026 Magic Quadrant for Enterprise Wired and Wireless LAN, reflecting continued traction in campus networking. Enterprise, routing and software offerings provide additional growth avenues while reducing dependence on any single product category over the long run.
Can Strong Financial Momentum Continue?Recent operating performance suggests business momentum remains robust. Second-quarter 2026 revenue increased 37.7% year over year to a record $3.04 billion, while non-GAAP EPS climbed nearly 40% to $1.02, exceeding the Zacks Consensus Estimate. Product revenue remained the primary growth engine as AI, cloud and enterprise demand accelerated.
Profitability also remains impressive. The company generated a non-GAAP operating margin of 49.9% despite continued investment in research and development. Management expects third-quarter revenue of approximately $3.3 billion while projecting non-GAAP operating margins between 48% and 49%, indicating confidence that demand remains healthy.
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The balance sheet also remains a significant strength. As of June 30, 2026, Arista held more than $13 billion in cash, cash equivalents and marketable securities, providing ample financial flexibility for future investment and innovation.
What Could Slow ANET After a Strong Run?Despite its strong outlook, several risks could limit additional upside. Competition remains intense across AI Ethernet networking, cloud switching and routing, with large networking vendors and emerging AI infrastructure providers pursuing the same high-growth opportunities.
Customer concentration also remains an important consideration, as a meaningful portion of revenue continues to come from a relatively small number of large cloud customers. Any reduction in capital spending from hyperscalers could create revenue volatility.
Execution risks also remain. AI deployments require timely product availability, efficient supply-chain management and continued technology leadership. In addition, if AI infrastructure spending moderates after the current investment cycle or customer deployments are delayed, revenue growth could slow from its current pace.
How the Zacks Signals Fit the StoryANET currently carries a Zacks Rank #2 (Buy), reflecting favorable earnings estimate trends. The stock also has a Growth Score of A, highlighting its strong earnings and revenue expansion prospects. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Its Momentum Score of C suggests that while the shares have appreciated significantly, momentum characteristics appear more balanced following the recent rally. Meanwhile, the Value Score of F indicates that investors are paying a premium valuation for the company's growth prospects, an unsurprising outcome given the stock's sharp advance and leadership position in AI networking. The VGM Score of C reflects a blend of outstanding growth characteristics offset by a rich valuation and more moderate momentum profile. Together, these signals suggest Arista remains an attractive growth story, although investors should recognize that much of its near-term upside depends on the company continuing to deliver exceptional execution to justify its premium valuation.
Key Takeaways Arista Networks launched new AI networking platforms for larger, more efficient AI clusters. Arista Networks expects at least $3.6 billion in 2026 AI revenue as Ethernet AI adoption expands. Arista Networks says AI fabric customers now exceed 100 and is expanding into scale-across AI networking. Arista Networks (ANET - Free Report) recently unveiled a new generation of AI networking platforms aimed at supporting increasingly complex AI infrastructure. The launch builds on the company's growing AI networking franchise and reflects its strategy of delivering high-performance Ethernet solutions that span scale-up, scale-out and scale-across AI deployments. While the new products expand Arista's long-term addressable market, investors will be watching customer adoption and execution to determine whether the company's AI momentum can continue.
How the New ANET Platform Targets AI ClustersArista's latest product introductions are designed to address the networking requirements of next-generation AI clusters. The company introduced the 7060XE7 Series, a family of 1.6-terabit Etherlink AI fabric platforms capable of delivering up to 100 terabits per second of system bandwidth. The new portfolio also includes liquid-cooled options, helping customers improve power efficiency while supporting larger AI deployments. According to management, the platforms are optimized for scale-up, scale-out and scale-across AI networking architectures, enabling customers to build increasingly powerful AI infrastructure while reducing networking bottlenecks.
Management also highlighted the company's flagship 7800 AI Spine platform, which enables customers to scale AI networks without adding additional networking tiers. These capabilities position Arista to support both traditional AI training clusters and geographically distributed AI environments.
Why Ethernet AI Matters for AristaEthernet continues gaining traction as AI networking architectures evolve, creating a significant opportunity for Arista. The company expects AI-related revenue of at least $3.6 billion in 2026, supported by expanding adoption of Ethernet-based AI fabrics. Management noted that cumulative AI fabric customers now exceed 100, up from only four to five customers in 2024, highlighting the rapid pace of adoption.
Beyond traditional scale-out networking, Arista is expanding into scale-across AI networking, which connects geographically distributed AI clusters. Management estimates this market could reach $15-$20 billion by 2030, with scale-across representing roughly 30% of the company's targeted AI revenue opportunity in 2026. This broadens Arista's addressable market while reinforcing Ethernet's growing role in AI infrastructure.
How Software Strengthens the AI OfferingHardware innovation is only part of Arista's AI strategy. The company's Extensible Operating System (EOS) provides a unified software platform across AI fabrics, cloud data centers and enterprise networks, helping customers simplify operations while improving scalability. During the earnings call, management highlighted several software innovations that differentiate its AI networking platform.
Smart System Upgrade (SSU) enables software upgrades without disrupting network operations, an important capability for AI clusters that require maximum uptime. Multipath Reliable Connection (MRC) improves AI training efficiency by allowing data flows to use multiple network paths simultaneously, while Segment Routing over IPv6 (SRv6) dynamically redirects traffic to avoid congestion and maximize network utilization. Combined with EOS automation and programmability, these technologies help improve AI cluster performance and operational efficiency.
What Investors Should Watch NextThe success of Arista's latest AI platforms will ultimately depend on customer adoption and execution. Investors should monitor the pace of AI platform deployments, expansion of the AI fabric customer base and management's ability to convert design wins into sustained revenue growth. Manufacturing readiness, supply-chain execution and timely product deliveries will also remain important as customers continue investing heavily in AI infrastructure.
Competition remains another key consideration. Arista competes with established networking vendors such as Cisco Systems, Inc. (CSCO - Free Report) and NVIDIA Corporation (NVDA - Free Report) , both of which are investing heavily in AI networking technologies. Cisco is expanding its Ethernet-based AI infrastructure portfolio, while NVIDIA continues strengthening its high-performance networking offerings for AI data centers. Continued product innovation and software differentiation will therefore be essential for Arista to maintain its leadership position in Ethernet-based AI networking.
How the Zacks Signals Frame the OpportunityANET currently carries a Zacks Rank #2 (Buy), reflecting favorable earnings estimate revisions following the company's strong operating performance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock also has a Growth Score of A, underscoring its robust earnings and revenue expansion prospects driven by AI networking demand. At the same time, its Value Score of F indicates that investors are assigning a premium valuation to those growth opportunities. Meanwhile, the Momentum Score of C suggests more balanced trading characteristics after the recent rally, while the VGM Score of C reflects an overall balanced profile. Together, these signals reinforce that Arista remains a compelling AI growth story, although continued execution will be critical to justify its premium valuation.
