News about Arista Networks

Arista Networks (NYSE: ANET) reported a record quarter driven by demand for its Ethernet-based AI data center equipment and raised its 2026 revenue outlook to US$12.6 billion, including at least US$3.5 billion to US$3.6 billion from AI networks. Management said Arista is winning AI data center projects that might previously have defaulted to Nvidia's InfiniBand interconnects as customers adopt open Ethernet fabrics. The article notes that a handful of hyperscalers still dominate demand and could cause orders to swing sharply. The cleanest early test, it argues, is how quickly AI fabric revenue approaches the 2026 target and how many customers adopt Etherlink, where management has already cited more than 100 adopters.

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%.

Arista Networks (ANET) makes high-speed Ethernet switches and networking software that move data quickly between GPUs, servers and storage in AI data centers, helping prevent bottlenecks that slow the whole operation. In June, it launched the 7060XE7 Series, supporting 1.6 terabit-per-second connections, and said its linear pluggable optics can cut interconnect power consumption by approximately 60% compared with traditional options. On Oct. 7, Arista announced a rack-scale networking architecture developed with AMD, Broadcom, Meta, Microsoft and Qualcomm, with its Etherlink SU-144 connecting up to 144 AI accelerators in a single hop and scaling to 1,024. Arista stock is up 54% so far this year, versus 50% for Cisco and 20% for Nvidia. Second-quarter revenue reached $3.03 billion, up 37.7% year over year; the company plans to report third-quarter results on Nov. 3 and guides to $3.3 billion in revenue.