Start here if you're new
what it is
Arista sells the high-speed switches and software that move data inside massive cloud and enterprise networks.
how it gets paid
Last year Arista Networks made $9.0B in revenue. data center switching was the main engine at $5.67B, or 63% of sales.
why it's growing
Revenue grew 28.6% last year. The 64.5% gross margin matters most because it shows Arista still has pricing power even while scaling into a larger AI-driven demand cycle.
what just happened
Arista's latest quarter beat expectations, with EPS hitting $0.82 versus a $0.74 estimate.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
80/100 earnings predictability — you can trust these numbers
46.3x trailing p/e — you're paying up for this one
33.5% return on capital — every dollar works hard here
xvary composite: 69/100 — average
What they do
Arista sells the high-speed switches and software that move data inside massive cloud and enterprise networks.
Arista wins because its hardware and software show up together. EOS (network operating system → the software that runs the switches → your network team learns one system and sticks with it) is paired with high-speed Ethernet gear, which makes ripping it out painful. The result is a 41.2% operating margin versus a 64.5% gross margin, which means Arista turns expensive networking gear into unusually fat profits.
How they make money
$9.0B
annual revenue · their business grew +28.6% last year
data center switching
$5.67B
campus and enterprise networking
$1.53B
subscription software and eos
$0.90B
services and support
$0.63B
other networking products
$0.27B
The products that matter
high-speed cloud networking hardware and software layer
Data Center Switching and Routing
$9.0B revenue · +28.6% growth
this is effectively the whole business. it grew 28.6% last year. the hardware gets the headline, but the margin profile tells you software is doing more of the work than most box vendors ever admit.
39.1% net margin
Key numbers
$164
18-month target
That is $36.57 above the current $127.43 price, or about 29% upside, so the bull case depends on the market still paying up.
41.2%
operating margin
Operating margin → money left after running the business → 41.2%. So what: Arista keeps more of each sales dollar than most hardware-heavy companies.
33.5%
return on capital
Return on capital → profit earned on money put into the business → 33.5%. So what: this business does not need huge spending to stay productive.
46.3x
trailing p/e
P/E → stock price compared with past 12-month earnings → 46.3 times. So what: you are paying a premium price for future growth today.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- net profit margin 38.7% — keeps 39 cents of every dollar in revenue
- return on equity 34% — $0.34 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ANET 3 years ago → it's now worth $37,250.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Arista's latest quarter beat expectations, with EPS hitting $0.82 versus a $0.74 estimate.
Revenue reached $6.5B, up 182% vs. prior year, while gross margin held at 64.5%. The quarter followed a strong fourth quarter of 2025, when quarterly EPS rose to $0.75.
$6.5B
revenue
$0.82
eps
64.5%
gross margin
the number that mattered
The 64.5% gross margin matters most because it shows Arista still has pricing power even while scaling into a larger AI-driven demand cycle.
-
arista networks posted strong fourth-quarter 2025 results.revenue rose to about $2.49 billion, driven by broad-based demand across its cloud, ai, and enterprise networking offerings. gross profits improved, and operating income expanded as economies of scale were achieved and the company benefited from slowing growth in its administrative costs, while net interest income earned rose.
-
earnings per share rose to $0.75 in the quarter.
-
the company is poised for solid expansion over the coming year.revenues will likely expand to about $10.7 billion, as the company gains from two major initiatives.
-
ai-related revenue will likely improve further as data center buildout continues.too, arista should gain from hyperscalers and specialty cloud customers, accelerating their buildouts. the cognitive campus and branch segment should benefit from the velocloud sd-wan acquisition completed in july 2025, a potential growth area. the velocloud deal expands reach from data centers into enterprise-wide area network, allowing it to hit a wider array of clients.
-
we project earnings of $3.40 per share in 2026.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
arista's risk is not abstract. the stock is priced for AI infrastructure demand, unusual margins, and smooth execution to keep showing up at the same time.
med
AI buildouts cool faster than expected
The bull case leans on hyperscalers keeping spending elevated. If that pace slows, 28.6% growth stops looking durable and starts looking cyclical.
The stock trades at 46.3x trailing earnings and around 37x forward earnings. That leaves limited room for a capex pause.
med
software-like margins drift back toward hardware reality
A 41.6% operating margin and 39.1% net margin are the rare part of this story. If pricing, mix, or competition push those down, the premium narrative weakens fast.
If margins compress, you do not just lose some profit. You lose the reason investors treat Arista like something more than a supplier.
med
product transitions stumble at higher speeds
The next leg depends on customers adopting faster networking gear across AI clusters and data centers. When the roadmap matters this much, delays matter too.
The 2026 revenue setup of about $10.7B–$11B assumes deployments keep moving. If they do not, both growth and sentiment take the hit.
A slowdown does not need to break the business to hurt the stock. It only needs to make a $9.0B company with premium margins look more ordinary than the market expected.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
revenue growth versus the $10.7B–$11B setup
That range is what supports the premium story from here. A miss matters more than another small beat because expectations are already loud.
trend
net margin holding near 39%
When a hardware company keeps margins like this, the multiple stays rich. If that slips, the narrative changes before the revenue line does.
calendar
the next earnings print
You want two things at once: demand commentary that still sounds strong and margin commentary that still sounds boring. That combination is the thesis.
risk
hyperscaler spending language
This is the real tell. If customers start talking optimization instead of expansion, ANET's valuation will notice before reported revenue does.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak: they still think the setup works.
risk profile
average
stability score 3 — this is normal risk for a growth stock. not a utility. not a bunker. not chaos either.
chart momentum
average
technical score 3 — the chart is not handing you a dramatic signal. the thesis still lives in the business.
earnings predictability
80 / 100
Management's numbers tend to hold up. If you own it, you usually are not bracing for wild earnings chaos.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 842 buyers vs. 699 sellers in 4q2025. total institutional holdings: 0.9B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$96
$231
$127
current price
$164
target midpoint · +29% from current · 3-5yr high: $140 (+10% · 3% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive