Company Reports

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its high market share at the highest speeds and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

Arista Networks' second-quarter results handily beat guidance, and management raised its full-year revenue guide by 10%. Sales rose 38% year over year to $3.06 billion, and 2026 guidance now sits at $12.6 billion (up from $11.5 billion), representing 40% growth.

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its high market share at the highest speeds and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

Arista Networks' first-quarter revenue and operating margin came in ahead of guidance, and management raised its full-year outlook for total revenue and artificial intelligence revenue. Shares dropped 13% after hours, likely due to full-year guidance missing even stronger expectations.

Arista Networks' fourth-quarter results beat guidance, and the firm raised its 2026 outlook to $11.25 billion in sales (25% growth), up from $10.65 billion. Management also raised its 2026 artificial intelligence revenue guidance to $3.25 billion (more than 100% growth), up from $2.75 billion.

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its high market share at the highest speeds and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its top market of high-speed ports above 100 gigabits and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

Arista Networks' third-quarter earnings beat management guidance, with sales rising 28% year over year to $2.31 billion. Fourth-quarter guidance implies a deceleration of sequential revenue growth. Management raised its 2025 and 2026 guidance to factor in the results and near-term guidance.

Arista Networks' 2025 analyst day on Sept. 11 highlighted its long-term growth strategy. It gave 2026 guidance, including a sales target of $10.5 billion, with $2.75 billion in artificial intelligence sales. It also guided for midteens growth through 2029 off of the 2026 guidance levels.

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its top market of high-speed ports above 100 gigabits and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

Arista Networks' second-quarter results crushed management guidance, and the firm significantly raised its full-year 2025 outlook. Revenue rose 30% year over year to $2.2 billion. 2025 guidance now calls for 25% revenue growth, to $8.75 billion, up from 17% growth.

Arista Networks' first-quarter results beat management guidance, with revenue rising 28% year over year to $2.0 billion and non-GAAP operating margin expanding 40 basis points year over year to 47.8%. Second-quarter guidance calls for further growth, with a midpoint of $2.1 billion.

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its top market of high-speed ports above 100 gigabits and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

Arista Networks' fourth-quarter results eclipsed all of management's guidance ranges. Revenue rose 25% year over year to $1.93 billion. First-quarter guidance implies more than 20% year-over-year growth, with a revenue midpoint of $1.95 billion.

We have consolidated our recent DeepSeek-related coverage in this note. Artificial intelligence affects companies across much of our coverage, including semiconductors, cloud infrastructure, software, utilities, and energy.

Many technology hardware stocks under our coverage plunged in Monday trading after reports of DeepSeek's R1 generative artificial intelligence model out of China offering performance parity to top US models at a much lower training cost. The iShares Semiconductor ETF was down 8% in midday trading.

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its top market of high-speed ports above 100 gigabits and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

We raise our fair value estimate for wide-moat Arista Networks to $300 per share from $270 upon raising our growth forecast. We’d already been expecting strong, high-teens growth from Arista over the next five years, but its success in artificial intelligence networking environments continues to impress us and we’ve bumped up our estimates further. Arista beat our third-quarter expectations, raised its full-year guidance, and provided an optimistic outlook for 2025. We expect results to come in above management guidance in both the fourth quarter and 2025, given a history of conservative guidance, our belief in Arista’s exceptional position within high-performance networking, and our expectations for robust AI investment to continue.

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its top market of high-speed ports above 100 gigabits and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

We maintain our $270 per share fair value estimate for wide-moat Arista Networks after its strong second quarter was in line with our long-term thesis. Arista’s results crushed its guidance ranges and it raised its full-year outlook closer in line with our bullish model. Strong growth and profitability in 2024 thus far adhere to our thesis for Arista to take share in high-speed networking over the next five years, particularly in artificial intelligence networks. We see the firm as best-of-breed for high-speed switching, which we expect to generate great growth as cloud providers invest in networking infrastructure to support AI clusters. We view its current valuation as challenging but believe patient long-term investors can wait for a better entry point for this blue-chip stock and its strong AI exposure.