Arista Networks (ANET)
Market Price (4/3/2026): $126.55 | Market Cap: $159.2 BilSector: Information Technology | Industry: Communications Equipment
Arista Networks (ANET)
Market Price (4/3/2026): $126.55Market Cap: $159.2 BilSector: Information TechnologyIndustry: Communications Equipment
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 29% Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 43% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 49%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 47%, CFO LTM is 4.4 Bil, FCF LTM is 4.3 Bil Megatrend and thematic driversMegatrends include Artificial Intelligence, Cloud Computing, and 5G & Advanced Connectivity. Themes include Data Centers & Infrastructure, Show more. | Key risksANET key risks include [1] a heavy reliance on a few major cloud customers like Microsoft and Meta and [2] a dependence on sole or limited-source suppliers for critical components such as merchant silicon. |
| Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 29% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 43% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 49%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 47%, CFO LTM is 4.4 Bil, FCF LTM is 4.3 Bil |
| Megatrend and thematic driversMegatrends include Artificial Intelligence, Cloud Computing, and 5G & Advanced Connectivity. Themes include Data Centers & Infrastructure, Show more. |
| Key risksANET key risks include [1] a heavy reliance on a few major cloud customers like Microsoft and Meta and [2] a dependence on sole or limited-source suppliers for critical components such as merchant silicon. |
Qualitative Assessment
AI Analysis | Feedback
1. Gross margin compression offset strong Q4 2025 results. Despite Arista Networks reporting Q4 2025 revenue of $2.49 billion, a 28.9% year-over-year increase, and diluted earnings per share of $0.82, exceeding analyst estimates, the non-GAAP gross margin for Q4 2025 was 63.4%, down from 64.2% in the prior year. This decrease was attributed to a higher mix of sales to cloud and AI customers. Furthermore, the company guided for a Q1 2026 gross margin between 62-63%, signaling continued margin pressure.
2. Substantial insider selling activity. Arista Networks experienced significant insider selling totaling over $48 million in the past 90 days. Notably, President and CTO Kenneth Duda engaged in multiple sales, with a total value exceeding $20 million, including a transaction on March 18, 2026, valued at $7,780,319. Such substantial divestment by key executives can signal concerns about future performance to investors.
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Stock Movement Drivers
Fundamental Drivers
The -3.4% change in ANET stock from 12/31/2025 to 4/3/2026 was primarily driven by a -7.7% change in the company's P/E Multiple.| (LTM values as of) | 12312025 | 4032026 | Change |
|---|---|---|---|
| Stock Price ($) | 131.03 | 126.55 | -3.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 8,448 | 9,006 | 6.6% |
| Net Income Margin (%) | 39.7% | 39.0% | -1.9% |
| P/E Multiple | 49.1 | 45.3 | -7.7% |
| Shares Outstanding (Mil) | 1,258 | 1,258 | 0.0% |
| Cumulative Contribution | -3.4% |
Market Drivers
12/31/2025 to 4/3/2026| Return | Correlation | |
|---|---|---|
| ANET | -3.3% | |
| Market (SPY) | -5.4% | 54.1% |
| Sector (XLK) | -5.5% | 66.2% |
Fundamental Drivers
The -13.1% change in ANET stock from 9/30/2025 to 4/3/2026 was primarily driven by a -19.5% change in the company's P/E Multiple.| (LTM values as of) | 9302025 | 4032026 | Change |
|---|---|---|---|
| Stock Price ($) | 145.71 | 126.55 | -13.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 7,951 | 9,006 | 13.3% |
| Net Income Margin (%) | 40.9% | 39.0% | -4.7% |
| P/E Multiple | 56.3 | 45.3 | -19.5% |
| Shares Outstanding (Mil) | 1,256 | 1,258 | -0.1% |
| Cumulative Contribution | -13.1% |
Market Drivers
9/30/2025 to 4/3/2026| Return | Correlation | |
|---|---|---|
| ANET | -13.1% | |
| Market (SPY) | -2.9% | 51.6% |
| Sector (XLK) | -3.4% | 64.2% |
Fundamental Drivers
The 63.3% change in ANET stock from 3/31/2025 to 4/3/2026 was primarily driven by a 32.4% change in the company's P/E Multiple.| (LTM values as of) | 3312025 | 4032026 | Change |
|---|---|---|---|
| Stock Price ($) | 77.48 | 126.55 | 63.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 7,003 | 9,006 | 28.6% |
| Net Income Margin (%) | 40.7% | 39.0% | -4.3% |
| P/E Multiple | 34.2 | 45.3 | 32.4% |
| Shares Outstanding (Mil) | 1,260 | 1,258 | 0.2% |
| Cumulative Contribution | 63.3% |
Market Drivers
3/31/2025 to 4/3/2026| Return | Correlation | |
|---|---|---|
| ANET | 63.5% | |
| Market (SPY) | 16.3% | 55.4% |
| Sector (XLK) | 32.3% | 64.3% |
Fundamental Drivers
The 201.6% change in ANET stock from 3/31/2023 to 4/3/2026 was primarily driven by a 105.5% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 3312023 | 4032026 | Change |
|---|---|---|---|
| Stock Price ($) | 41.97 | 126.55 | 201.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,381 | 9,006 | 105.5% |
| Net Income Margin (%) | 30.9% | 39.0% | 26.3% |
| P/E Multiple | 38.0 | 45.3 | 19.3% |
| Shares Outstanding (Mil) | 1,225 | 1,258 | -2.6% |
| Cumulative Contribution | 201.6% |
Market Drivers
3/31/2023 to 4/3/2026| Return | Correlation | |
|---|---|---|
| ANET | 201.9% | |
| Market (SPY) | 63.3% | 54.6% |
| Sector (XLK) | 83.6% | 65.4% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ANET Return | 98% | -16% | 94% | 88% | 19% | -5% | 587% |
| Peers Return | 62% | -12% | 20% | 37% | 47% | 21% | 317% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -4% | 75% |
Monthly Win Rates [3] | |||||||
| ANET Win Rate | 75% | 42% | 67% | 83% | 75% | 50% | |
| Peers Win Rate | 65% | 40% | 60% | 63% | 57% | 70% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| ANET Max Drawdown | -8% | -37% | -10% | -3% | -42% | -11% | |
| Peers Max Drawdown | -3% | -38% | -12% | -13% | -32% | -11% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: CSCO, HPE, DELL, EXTR, CIEN. See ANET Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 4/2/2026 (YTD)
How Low Can It Go
| Event | ANET | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -38.4% | -25.4% |
| % Gain to Breakeven | 62.4% | 34.1% |
| Time to Breakeven | 265 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -34.0% | -33.9% |
| % Gain to Breakeven | 51.6% | 51.3% |
| Time to Breakeven | 129 days | 148 days |
| 2018 Correction | ||
| % Loss | -43.6% | -19.8% |
| % Gain to Breakeven | 77.3% | 24.7% |
| Time to Breakeven | 566 days | 120 days |
Compare to CSCO, HPE, DELL, EXTR, CIEN
In The Past
Arista Networks's stock fell -38.4% during the 2022 Inflation Shock from a high on 12/27/2021. A -38.4% loss requires a 62.4% gain to breakeven.
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About Arista Networks (ANET)
AI Analysis | Feedback
Like Cisco, but specializing in high-performance networking for cloud data centers.
AI Analysis | Feedback
- Extensible Operating Systems: Software that powers their cloud networking solutions.
- Network Applications: A suite of software applications designed for network management and functionality.
- Gigabit Ethernet Switching and Routing Platforms: Hardware devices providing high-speed network connectivity and traffic management capabilities.
- Post Contract Customer Support Services: Comprehensive support including technical assistance, hardware repair and parts replacement, and software updates and patches.
AI Analysis | Feedback
Arista Networks (ANET) primarily sells its cloud networking solutions to other companies.
Its major customers include:
- Microsoft (MSFT)
- Meta Platforms (META)
Beyond these specific major customers, Arista Networks serves a broad range of industries, including other internet companies, service providers, financial services organizations, government agencies, and media and entertainment companies.
AI Analysis | Feedback
- Celestica Inc. (CLS)
- Sanmina Corporation (SANM)
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Jayshree Ullal, Chief Executive Officer and Chairperson
Jayshree Ullal has served as President and CEO of Arista Networks since October 2008 and became Chairperson in December 2023. She led the company to its initial public offering in June 2014. Prior to Arista, Ms. Ullal spent 15 years at Cisco Systems, where she was Senior Vice President, overseeing a $10 billion business in datacenter, switching, and services, and oversaw approximately 20 mergers and acquisitions in the enterprise sector. Before Cisco, she was the Vice President of Marketing at Crescendo Communications, which Cisco acquired in 1993. Her early career included engineering and strategy roles at Advanced Micro Devices (AMD), Fairchild Semiconductor, and Ungermann-Bass.
Chantelle Breithaupt, Chief Financial Officer
Chantelle Breithaupt was appointed Chief Financial Officer of Arista Networks, effective February 2024, succeeding Ita Brennan. She brings over 25 years of experience in global financial roles. Before joining Arista, Ms. Breithaupt served as Senior Vice President and CFO of Aspen Technology. Her career also includes executive finance positions at Cisco Systems and across four GE businesses.
Kenneth Duda, Co-Founder, President and Chief Technology Officer
Kenneth Duda co-founded Arista Networks in 2004 and has been its Chief Technology Officer and Senior Vice President of Software Engineering since September 2011, also holding the title of President. He is the lead architect of Arista Networks' Extensible Operating System (EOS). Prior to Arista Networks, Mr. Duda was CTO of There.com. He was also the fourth employee at Granite Systems, a leader in gigabit Ethernet switches, and continued his leadership role at Cisco Systems after its acquisition of Granite. Mr. Duda holds three simultaneous engineering degrees from MIT and a Ph.D. in Computer Science from Stanford University.
Todd Nightingale, President and Chief Operating Officer
Todd Nightingale joined Arista Networks as President and Chief Operating Officer, effective July 1, 2025, focusing on enterprise data centers, campus networks, and manufacturing. Before Arista, he served as CEO and a Board Member at Fastly, Inc. from September 2022 to June 2025. Mr. Nightingale also held leadership positions at Cisco Systems, Inc., including Executive Vice President and General Manager of Enterprise Networking and Cloud, and Senior Vice President and General Manager of Cisco Meraki. He holds a Bachelor of Science and a Master's in engineering from the Massachusetts Institute of Technology.
Andreas "Andy" Bechtolsheim, Co-Founder and Chief Architect
Andreas "Andy" Bechtolsheim co-founded Arista Networks in 2004 (originally Arastra). He currently serves as Chief Architect for Arista Networks, a role he transitioned to in December 2023, having previously been an executive officer and on the board. Mr. Bechtolsheim also co-founded Sun Microsystems in 1982, where he was its chief hardware designer. [cite: 3 (from previous search output)] He has been a founding member of the Open Compute Project (OCP) Board of Directors since 2011. [cite: 8 (from previous search output)] He holds an M.S. in Computer Engineering from Carnegie Mellon University and was a doctoral student at Stanford University. [cite: 8 (from previous search output)]
AI Analysis | Feedback
Arista Networks (ANET) faces several key risks to its business operations and financial performance:- Customer Concentration: A significant portion of Arista Networks' revenue is derived from a limited number of large cloud and AI customers. For instance, over 40% of its revenue comes from two customers, and Microsoft's contribution increased to 20% in fiscal year 2024. This heavy reliance makes the company vulnerable to any changes in these key customers' spending patterns, capital expenditure cuts, or strategic shifts, which could lead to substantial revenue fluctuations.
- Intense Competition: Arista operates in a highly competitive networking market. It faces strong competition from established players such as Cisco, Juniper Networks (now combined with HPE), Dell/EMC, Extreme Networks, and Huawei, as well as emerging threats like Nvidia in the AI networking space and white-box networking vendors. This intense competition can result in increased pricing pressure, reduced profit margins, and challenges in maintaining market share and its technological edge.
- Supply Chain Risks and Technological Disruption: The company faces risks related to its supply chain, particularly its reliance on sole or limited sources for key components, such as merchant silicon from vendors like Broadcom. Geopolitical risks can further constrain the availability of these key components, and the rapid pace of new interconnect technology could disrupt current standards, leading to potential supply shortages, extended lead times, increased costs, and the need for continuous innovation to stay ahead.
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The increasing maturity and widespread adoption of disaggregated networking solutions, combining commodity "white box" hardware with sophisticated open-source network operating systems (such as SONiC), which offer lower costs and greater flexibility, potentially eroding the market for proprietary integrated networking solutions.
AI Analysis | Feedback
Arista Networks (ANET) operates within several significant addressable markets related to cloud networking, Ethernet switching, and routing platforms.
According to statements by Arista Networks' CEO in March 2026, the company's total addressable market (TAM) has grown from $60 billion to an estimated $105 billion, driven by demand in AI and cloud infrastructure, data center growth, and strategic expansions into campus and routing, as well as increased observability market opportunities.
Specific addressable markets for Arista Networks' products and services include:
- Data Center Networking: The global data center networking market was estimated at USD 38.49 billion in 2024 and is projected to reach USD 154.83 billion by 2033, exhibiting a compound annual growth rate (CAGR) of 17.2% from 2025 to 2033. Another projection places the global data center networking market size at USD 44.37 billion in 2026, growing to USD 114.08 billion by 2034 with a CAGR of 12.53%. BNP Paribas projects the total addressable data center networking market to reach $120 billion by 2028.
- Ethernet Switching: The global Ethernet switch market was valued at USD 43.84 billion in 2025 and is projected to grow to USD 76.4 billion by 2034, with a CAGR of 6.48%. Separately, the worldwide Ethernet switch market recorded USD 14.7 billion in revenue in the third quarter of 2025 alone. Another estimate values the global Ethernet switch market at USD 12.66 billion in 2024, expecting it to reach USD 19.92 billion by 2032, growing at a CAGR of 5.89% from 2025 to 2032.
- Data Center Routing: The global data center router market was valued at USD 3.08 billion in 2024 and is projected to reach USD 14.23 billion by 2034, growing at a CAGR of 16.54% during the forecast period of 2025–2034. Another report estimates the global data center router market at USD 10.25 billion in 2025, anticipated to reach USD 13.44 billion by 2032, with a CAGR of 4.0% from 2026 to 2032.
- Cloud Managed Networking / Multi-Cloud Networking: The global multi-cloud networking market size was estimated at USD 2.03 billion in 2024 and is projected to reach USD 13.14 billion by 2033, growing at a CAGR of 23.7% from 2025 to 2033. The global multi-cloud networking market was valued at USD 2.8 billion in 2023 and is estimated to reach USD 18.7 billion by 2032, registering a CAGR of over 23.5% between 2024 and 2032.
AI Analysis | Feedback
Arista Networks (ANET) is positioned for robust revenue growth over the next two to three years, driven by several key factors:
- Explosive Growth in AI Networking: Arista Networks is a primary beneficiary of the substantial investments being made in artificial intelligence (AI) infrastructure. The company has significantly raised its AI networking revenue targets for 2026 to $3.25 billion, reflecting accelerating customer adoption in both traditional and emerging cloud sectors. This growth is propelled by its Etherlink portfolio and strategic collaborations with AI leaders such as NVIDIA, Arm, AMD, and OpenAI, as well as the industry's shift from InfiniBand to Ethernet for AI clusters.
- Continued and Expanding Hyperscale Cloud Provider Business: Arista maintains strong, deep-seated relationships with major hyperscale cloud providers, including Microsoft and Meta, which represent a significant portion of its revenue. These "cloud titans" are undertaking large capital outlays for compute and data center build-outs, directly benefiting Arista. Furthermore, the company anticipates adding one or two additional 10% customers in 2026, indicating ongoing diversification and expansion within this critical segment.
- Accelerated Transition to Next-Generation Ethernet Switching Platforms: The rapid upgrade cycle for Ethernet switching technology, particularly the transition to 800 Gigabit Ethernet and the imminent 1.6 terabit migration, is a substantial revenue driver. The cadence for these upgrades has reportedly shortened from 3-5 years to approximately two years, leading to accelerated adoption and significant growth in demand for Arista's advanced 7000 Series platforms.
- Expansion into the Enterprise Market and Cognitive Campus: Beyond its core cloud business, Arista is experiencing an accelerating pace of acceptance and adoption within the enterprise customer base. The expansion of its cognitive campus and branch networking portfolio is positioning the company for diversified customer growth and broader market penetration.
- Increasing Contribution from Software and Services: Arista's software offerings, such as its CloudVision network-as-a-service platform and the Network Data Lake (NetDL) for AI/ML-driven automation and security, are gaining significant traction. These services are adding new customers and steadily contributing to the company's overall revenue, enhancing its comprehensive solution portfolio.
AI Analysis | Feedback
Share Repurchases
- Arista's Board of Directors authorized an additional $1.5 billion stock repurchase program in May 2025.
- An additional $1.2 billion stock repurchase program was authorized by the Board in May 2024.
- In the first quarter of 2025, Arista completed $787 million in stock repurchases, which was the highest quarterly or annual amount in the company's history. Annual share buybacks were $1.603 billion in 2025, $423.619 million in 2024, and $112.279 million in 2023.
Share Issuance
- Arista Networks' shares outstanding saw a 0.42% decline in 2025 to 1.276 billion, following a 0.99% increase in 2024 to 1.281 billion and a 0.21% increase in 2023 to 1.269 billion.
- The net common equity issued/repurchased for 2025 was -$3.000 billion, indicating a net repurchase of shares.
Inbound Investments
- Arete Wealth Advisors LLC made a new investment of approximately $4.93 million in Arista Networks during the third quarter (as of a March 2026 report).
Outbound Investments
- In July 2025, Arista acquired the VeloCloud SD-WAN portfolio from Broadcom to accelerate its AI-driven campus and branch networking strategy.
- Arista Networks acquired Pluribus Networks, a unified cloud network company, in August 2022.
Capital Expenditures
- Arista Networks' capital expenditures averaged $34.643 million from fiscal years ending December 2020 to 2024.
- Capital expenditures are projected to increase significantly from $32 million in FY2024 to an estimated $120 million in FY2025.
- The primary focus of the increased capital expenditures for FY2025 includes investments in a 1.6T product development lab, VeloCloud integration, and internal AI/ML training facilities.
Latest Trefis Analyses
Trade Ideas
Select ideas related to ANET.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 03312026 | PANW | Palo Alto Networks | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | 0.0% | 0.0% | 0.0% |
| 03312026 | ALKT | Alkami Technology | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 0.0% | 0.0% | 0.0% |
| 03272026 | DBX | Dropbox | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 2.6% | 2.6% | 0.0% |
| 03272026 | DLB | Dolby Laboratories | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 3.5% | 3.5% | 0.0% |
| 03272026 | PTC | PTC | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 3.5% | 3.5% | 0.0% |
| 02282025 | ANET | Arista Networks | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 46.7% | 43.5% | -30.8% |
| 08312022 | ANET | Arista Networks | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 15.6% | 62.9% | -16.3% |
| 01312022 | ANET | Arista Networks | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | -5.4% | 1.4% | -27.3% |
| 08312020 | ANET | Arista Networks | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 28.9% | 65.4% | -12.7% |
| 02292020 | ANET | Arista Networks | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 15.0% | 44.9% | -18.7% |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 102.84 |
| Mkt Cap | 89.4 |
| Rev LTM | 22,374 |
| Op Inc LTM | 2,787 |
| FCF LTM | 3,203 |
| FCF 3Y Avg | 2,727 |
| CFO LTM | 4,429 |
| CFO 3Y Avg | 3,968 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 19.4% |
| Rev Chg 3Y Avg | 5.8% |
| Rev Chg Q | 23.6% |
| QoQ Delta Rev Chg LTM | 5.4% |
| Op Mgn LTM | 7.7% |
| Op Mgn 3Y Avg | 7.1% |
| QoQ Delta Op Mgn LTM | 0.1% |
| CFO/Rev LTM | 15.4% |
| CFO/Rev 3Y Avg | 14.5% |
| FCF/Rev LTM | 12.2% |
| FCF/Rev 3Y Avg | 9.4% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 89.4 |
| P/S | 3.5 |
| P/EBIT | 31.4 |
| P/E | 36.8 |
| P/CFO | 18.7 |
| Total Yield | 2.0% |
| Dividend Yield | 0.6% |
| FCF Yield 3Y Avg | 4.9% |
| D/E | 0.1 |
| Net D/E | 0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 10.7% |
| 3M Rtn | 3.6% |
| 6M Rtn | 9.9% |
| 12M Rtn | 81.0% |
| 3Y Rtn | 134.8% |
| 1M Excs Rtn | 14.9% |
| 3M Excs Rtn | 7.3% |
| 6M Excs Rtn | 10.4% |
| 12M Excs Rtn | 44.4% |
| 3Y Excs Rtn | 78.9% |
Comparison Analyses
Price Behavior
| Market Price | $126.68 | |
| Market Cap ($ Bil) | 159.3 | |
| First Trading Date | 06/06/2014 | |
| Distance from 52W High | -21.8% | |
| 50 Days | 200 Days | |
| DMA Price | $134.76 | $131.54 |
| DMA Trend | up | indeterminate |
| Distance from DMA | -6.0% | -3.7% |
| 3M | 1YR | |
| Volatility | 57.6% | 52.9% |
| Downside Capture | 1.33 | 1.21 |
| Upside Capture | 280.42 | 211.72 |
| Correlation (SPY) | 52.3% | 54.9% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 2.91 | 2.56 | 2.40 | 2.09 | 1.57 | 1.81 |
| Up Beta | 6.24 | 3.61 | 2.46 | 1.69 | 1.07 | 1.28 |
| Down Beta | 3.16 | 2.27 | 1.85 | 1.93 | 1.73 | 2.14 |
| Up Capture | 330% | 265% | 336% | 264% | 393% | 1555% |
| Bmk +ve Days | 7 | 16 | 27 | 65 | 139 | 424 |
| Stock +ve Days | 10 | 19 | 28 | 65 | 144 | 418 |
| Down Capture | 201% | 221% | 211% | 187% | 143% | 112% |
| Bmk -ve Days | 12 | 23 | 33 | 58 | 110 | 323 |
| Stock -ve Days | 12 | 23 | 35 | 61 | 107 | 331 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ANET | |
|---|---|---|---|---|
| ANET | 61.2% | 54.1% | 1.08 | - |
| Sector ETF (XLK) | 31.5% | 27.0% | 0.99 | 64.4% |
| Equity (SPY) | 16.1% | 19.0% | 0.67 | 55.5% |
| Gold (GLD) | 50.5% | 28.0% | 1.46 | 9.6% |
| Commodities (DBC) | 16.2% | 17.7% | 0.77 | 19.4% |
| Real Estate (VNQ) | 3.6% | 16.5% | 0.04 | 19.9% |
| Bitcoin (BTCUSD) | -21.5% | 44.0% | -0.42 | 29.7% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ANET | |
|---|---|---|---|---|
| ANET | 45.4% | 45.9% | 0.97 | - |
| Sector ETF (XLK) | 16.3% | 24.7% | 0.59 | 66.4% |
| Equity (SPY) | 11.6% | 17.0% | 0.53 | 57.9% |
| Gold (GLD) | 21.7% | 17.8% | 1.00 | 9.2% |
| Commodities (DBC) | 11.6% | 18.8% | 0.51 | 14.8% |
| Real Estate (VNQ) | 3.3% | 18.8% | 0.08 | 27.0% |
| Bitcoin (BTCUSD) | 3.9% | 56.5% | 0.29 | 23.9% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ANET | |
|---|---|---|---|---|
| ANET | 42.4% | 44.4% | 0.96 | - |
| Sector ETF (XLK) | 21.4% | 24.3% | 0.81 | 61.6% |
| Equity (SPY) | 14.0% | 17.9% | 0.67 | 55.4% |
| Gold (GLD) | 14.0% | 15.9% | 0.73 | 4.5% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/12/2026 | 4.8% | -1.7% | 0.2% |
| 11/4/2025 | -8.6% | -12.1% | -16.3% |
| 8/5/2025 | 17.5% | 19.6% | 19.5% |
| 5/6/2025 | -4.8% | 7.1% | 4.9% |
| 2/18/2025 | -6.4% | -16.4% | -24.0% |
| 11/7/2024 | -7.1% | -10.5% | -1.7% |
| 7/30/2024 | 11.3% | 3.9% | 9.5% |
| 5/7/2024 | 6.5% | 14.5% | 8.2% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 12 | 16 |
| # Negative | 10 | 12 | 8 |
| Median Positive | 6.1% | 11.3% | 11.0% |
| Median Negative | -6.0% | -9.9% | -10.5% |
| Max Positive | 20.4% | 28.8% | 25.7% |
| Max Negative | -15.7% | -16.7% | -24.0% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 12/31/2025 | 02/17/2026 | 10-K |
| 09/30/2025 | 11/05/2025 | 10-Q |
| 06/30/2025 | 08/06/2025 | 10-Q |
| 03/31/2025 | 05/07/2025 | 10-Q |
| 12/31/2024 | 02/19/2025 | 10-K |
| 09/30/2024 | 11/08/2024 | 10-Q |
| 06/30/2024 | 07/31/2024 | 10-Q |
| 03/31/2024 | 05/08/2024 | 10-Q |
| 12/31/2023 | 02/13/2024 | 10-K |
| 09/30/2023 | 10/31/2023 | 10-Q |
| 06/30/2023 | 08/01/2023 | 10-Q |
| 03/31/2023 | 05/02/2023 | 10-Q |
| 12/31/2022 | 02/14/2023 | 10-K |
| 09/30/2022 | 11/01/2022 | 10-Q |
| 06/30/2022 | 08/02/2022 | 10-Q |
| 03/31/2022 | 05/03/2022 | 10-Q |
Recent Forward Guidance [BETA]
Latest: Q4 2025 Earnings Reported 2/12/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q1 2026 Revenue | 2.60 Bil | 10.6% | Raised | Guidance: 2.35 Bil for Q4 2025 | |||
| Q1 2026 Non-GAAP Gross Margin | 62.0% | 62.5% | 63.0% | 0 | 0 | Affirmed | Guidance: 62.5% for Q4 2025 |
| Q1 2026 Non-GAAP Operating Margin | 46.0% | -3.2% | -1.5% | Lowered | Guidance: 47.5% for Q4 2025 | ||
Prior: Q3 2025 Earnings Reported 11/4/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q4 2025 Revenue | 2.30 Bil | 2.35 Bil | 2.40 Bil | 4.4% | Higher New | Guidance: 2.25 Bil for Q3 2025 | |
| Q4 2025 Non-GAAP Gross Margin | 62.0% | 62.5% | 63.0% | -2.3% | -1.5% | Lower New | Guidance: 64.0% for Q3 2025 |
| Q4 2025 Non-GAAP Operating Margin | 47.0% | 47.5% | 48.0% | 1.1% | 0.5% | Higher New | Guidance: 47.0% for Q3 2025 |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Giancarlo, Charles H | by Trust | Sell | 1062026 | 133.79 | 8,000 | 1,070,291 | 2,379,258 | Form | |
| 2 | Duda, Kenneth | President and CTO | Direct | Sell | 12192025 | 123.16 | 30,000 | 3,694,672 | 1,598,069 | Form |
| 3 | Duda, Kenneth | President and CTO | Childrens' Trust | Sell | 12192025 | 123.16 | 16,000 | 1,970,493 | 140,787,769 | Form |
| 4 | Duda, Kenneth | President and CTO | Foundation | Sell | 12192025 | 123.16 | 10,000 | 1,231,557 | 65,568,094 | Form |
| 5 | Giancarlo, Charles H | by Trust | Sell | 12032025 | 128.09 | 8,000 | 1,024,749 | 3,302,765 | Form |
ANET Trade Sentinel
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The analysis yields a probability-adjusted skew greater than 2.0x. This high score is driven by the combination of a 'WIDENING' competitive moat in the primary AI growth segment and a 'STRONG' secular sector trend. While the downside risk of a capex pause is significant, its probability is outweighed by the high likelihood of the powerful AI upgrade cycle continuing, which underpins the 'High Conviction Bull' thesis.
STOCK ARCHETYPE
High-Beta CompounderArista's high revenue growth (~28%), premium valuation (P/S > 20x), and central role in the secular AI build-out align with a high-beta growth profile, despite its revenue being tied to cyclical Capex. The market is valuing its potential for sustained, high-speed compounding driven by a structural technology shift.
INVESTMENT THESIS
The primary long thesis is Arista's position as the leading provider of high-speed Ethernet switching for AI and cloud data centers. As hyperscalers aggressively build out GPU clusters, they require Arista's best-in-class, low-latency network fabrics to connect them, creating a durable, multi-year upgrade cycle from 100G/200G to 400G and 800G.
- AI-related revenue forecast for 2025 was doubled to $1.5B, with a projection of $2.75B in 2026, indicating massive acceleration.
- Deferred Revenue of $4.7B (+87% YoY) as of Q3 2025 provides exceptionally high near-term visibility.
- Dominant competitive position in the 'Hyperscale AI Innovator' customer segment, which is the epicenter of AI infrastructure spending.
- Market is in a supply deficit for high-speed switching, providing Arista with strong pricing power.
PRIMARY RISK
The single largest risk is a slowdown or pause in spending from Arista's top two customers, Microsoft and Meta. Due to extreme customer concentration (historically ~40% of revenue), any signal of 'capital optimization' or 'inventory digestion' after massive 2025 build-outs would immediately pressure revenue growth and trigger a significant multiple compression.
- High Customer Concentration is identified as a 'STRUCTURAL' impact risk.
- The top tangible risk for the next 6 months is identified as 'Cloud Titan CapEx 'Digestion' Narrative Emerges in Q4 Earnings' with a 'CRITICAL' impact level.
- The stock's negative reaction to a cautious gross margin forecast in November 2025 demonstrates its high sensitivity to any signs of slowing momentum.
| KPI | Threshold | Rationale |
|---|---|---|
| Product Revenue Growth (YoY) | > 20% | This is the primary metric reflecting share gains and demand velocity within the core high-speed switching market. A drop below 20% would signal a material deceleration. |
| Deferred Revenue | Positive Sequential Growth | This is the best leading indicator of future revenue. A stall or decline in this metric would be a strong early warning that the pipeline is weakening before it's visible in reported revenue. |
| Non-GAAP Gross Margin | > 62% | Management has guided for 62-63%. Holding above this floor is critical to prove that pricing power is intact and that competitive threats (e.g., Nvidia) or mix shifts are not eroding profitability. |
The AI Supercycle vs. Hyperscaler Concentration
BULL VIEW
Arista is the key plumbing for the multi-year AI buildout. Massive deferred revenue and superior technology create a durable growth runway, insulating it from short-term capex shifts.
CORE TENSION
Whether explosive AI-driven demand can sustainably outrun the immense risk of dependency on the capex cycles of two main customers (Microsoft, Meta).
PREVAILING SENTIMENT
The $4.7B in deferred revenue and management's doubling of the 2025 AI revenue forecast provide strong, forward-looking evidence that the bull case is currently winning.
BEAR VIEW
Extreme customer concentration makes the stock highly vulnerable. Any 'digestion' or 'optimization' in cloud spending would immediately halt Arista's growth narrative and compress its high valuation.
| Timeline | Event & Metric To Watch |
|---|---|
Feb 12, 2026 | Q4 2025 Earnings & Q1 2026 Guidance Watch: Commentary on cloud customer 'demand pause' or 'inventory digestion'. Sequential revenue guidance for Q1 2026. |
March 16-19, 2026 | Nvidia GTC 2026 Conference Watch: Performance metrics and customer adoption announcements for Nvidia's competing Spectrum-X Ethernet platform. |
Anytime (Next 6 months) | Macro Data: Fed Commentary / 10-Yr Treasury Watch: 10-Year Treasury Yield breaking above a key technical level (e.g., 4.5%) or hawkish Fed statements. |
Anytime (Next 6 months) | U.S. Export Control Announcements Watch: Inclusion of 'high-performance networking' equipment in new export restrictions to China by the BIS. |
| Date | Event | Stock Impact |
|---|---|---|
8/1/2025 | Key Customer Meta Platforms Provides Tepid Guidance Details: Following Meta's earnings report, concerns about the pace of its future capital expenditures weighed on supplier stocks, including Arista, ahead of its own report. | Fell notably by -4.58% $123.22 -> $117.57 |
8/6/2025 | Q2 2025 Earnings Report Details: Arista delivered a significant revenue and earnings beat and raised its full-year guidance, citing unprecedented demand for its AI networking solutions. | Surged +17.5% $118.12 -> $138.78 |
9/10/2025 | Investor Conference Presentation Details: Following a presentation at a major technology conference (e.g., Citi Global Tech), the stock rallied as management likely reiterated the strength of AI-driven demand. | Surged +6.21% $141.91 -> $150.72 |
10/8/2025 | Positive Analyst Commentary & Sector Momentum Details: The stock surged on a high-volume day, likely driven by positive analyst reports and a broader rally in AI-related infrastructure stocks ahead of earnings season. | Surged +8.31% $145.29 -> $157.36 |
11/4/2025 | Q3 2025 Earnings Report Details: Despite beating revenue and EPS estimates, the stock fell sharply after the company's Q4 gross margin forecast of 62-63% fell short of analyst expectations. | Plummeted -8.55% $153.55 -> $140.42 |
1/27/2026 | Key Customer Microsoft Reports Strong Capex Details: Microsoft announced strong Q4 2025 results with robust capital expenditure guidance, fueling positive sentiment for key AI infrastructure suppliers like Arista. | Rose significantly by 2.07% $143.72 -> $146.69 |
Position Sizing
4%-6%
NORMAL
Stock trades with Explosive volatility (4.36x S&P 500). While the Bullish sentiment and high visibility are compelling, the Expensive valuation prevents an aggressive size. Capping exposure to Normal manages drawdown risk.
Diversification Alternatives
NVDA
SECTOROffers a fully integrated, 'full stack' hardware and software solution for AI, reducing vendor complexity. Its CUDA ecosystem creates an unparalleled competitive moat.
AVGO
SECTORDiversified exposure across AI infrastructure, including best-in-class networking silicon and custom ASIC solutions for hyperscalers, providing a broader, less concentrated bet on the theme.
Arista Networks is re-rating from a niche Cloud Titan supplier to the foundational enabler of the AI networking supercycle, evidenced by its $3.25B AI revenue target for 2026, while expanding its share in the enterprise campus market.
Filter all news through the lens of AI-driven Ethernet adoption and enterprise market share gains against Cisco.
Named design wins for AI clusters beyond existing hyperscalers (e.g. Oracle, emerging AI labs); Ethernet gaining share from InfiniBand in AI back-end networks (cite: Dell'Oro Group); Enterprise/Campus revenue growth accelerating above 20% YoY; announcements of new 800G or 1.6T switching platforms.
Deceleration of capex spending plans from Microsoft or Meta; announcements of either major customer adopting a competitor's technology (e.g. Nvidia Spectrum-X) or white-box solutions for AI back-end networks; campus switching market share stalling or declining.
Quarterly fluctuations in Cloud Titan revenue mix – lumpy orders are inherent to the business model and already guided; short-term gross margin dips due to higher sales to hyperscalers – a known and accepted trade-off for volume; general data center spending forecasts – too broad, the key is specific AI-related buildouts.
Repricing Catalyst
The explicit doubling-down on AI as the primary growth engine. Management raised its AI networking revenue target to $3.25 billion for FY2026, up from a $1.5 billion actual in FY2025. This quantifies the transition from a secondary tailwind to the core driver of forward growth, compelling the market to value Arista as a primary AI infrastructure beneficiary, not just a cloud hardware vendor.
Data Center & AI Networking Platforms
$7.5B TTM (83% of Total) · 64% MarginWhat It Is
High-speed (100G to 800G) Ethernet switches (e.g., 7060X/7388X series for AI leaf, 7800R4 for AI spine), routers, and the unified Extensible Operating System (EOS) software that runs across all hardware.
Who Pays & How
Microsoft (26% of FY2025 revenue) and Meta (16% of FY2025 revenue) pay for scalable, high-performance, and programmable network infrastructure for their massive data centers. The primary lock-in is the single EOS software image, which drastically simplifies network automation and management at hyper-scale, making a shift to a competitor's disparate operating systems operationally complex and costly.
Competition
Network Services & Subscriptions
$1.5B TTM (17% of Total) · 64% MarginWhat It Is
CloudVision network management and automation software, technical support services, and other subscription-based software.
Who Pays & How
The same customers who buy the hardware pay for ongoing support and advanced software features to manage the entire network as a single, cohesive fabric, reducing operational overhead.
Competition
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