Arista Networks (ANET) and Cisco Systems (CSCO) both reported record AI-driven results in August, yet their stocks sold off sharply. Arista's revenue reached $3.04B, up 37.7% year over year and above the $2.83B estimate, and it raised its 2026 outlook to about $12.6 billion. Cisco's networking revenue rose 28% to $9.791B, and hyperscaler AI orders hit $4 billion in the quarter. Arista focuses on a product line built on EOS software and faces customer concentration risk, while Cisco controls more of its own supply chain, though its non-GAAP gross margin slipped to 66.3% from 68.4%. The article notes Arista's gross margin target of 62% to 64%, and that last week Arista fell 11.41% and Cisco fell 7.27%.
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