Arista Networks (ANET)
NYSEInformation TechnologyComputer HardwareSnapshot 2026-09-04
$193.78+1.22%
Close 2026-09-04 · 1-day change
NYSEInformation TechnologyComputer HardwareSnapshot 2026-09-04
Intact: The reason to own it still holds.
Arista grows revenue about 30% a year. Profit margins stay near 46%. AI sales are doubling and help growth. New products support more sales.
Supply problems could slow revenue growth. Gross margins have fallen recently. Competition may hurt sales growth.
The price is about 28% above our fair value near $131. Analysts expect about 30% revenue growth. Our fair value is below the Street median of $181.
Breaks if: AI sales growth falls below 50% next year
Breaks if: Gross margin falls below 61% next quarter
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on consistent revenue growth and strong margins. The current thesis state is stable, supported by recent earnings beats and management's clear priorities.
The market currently reflects an expensive valuation compared to peers, with an expectations gap indicating that some positive performance is already anticipated. The valuation appears unjustified given the current fundamentals.
Management has successfully achieved strong revenue growth and maintained stable gross and operating margins. While there is a low probability of missing earnings expectations, recent trends show a slight decline in earnings surprises.
Key factors for the future include guidance updates from management, potential changes in Federal Reserve interest rates, and performance from sector leaders like DELL and SNDK. Any negative guidance could impact sentiment significantly.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports this view. There is strong demand for AI networking and platform innovation. Industry reports show increased spending on data center infrastructure. This trend is expected to continue for several quarters.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Sustain non-GAAP gross margins around 63-65% despite market and supply challenges.
Stated as a priority in 7 of last 7 quarters. Non-GAAP gross margins have been stable around 63-65%, with 63.4% in 2026-Q2 and 62.4% in 2026-Q1. Management's guidance and results show consistent delivery of strong gross margins, matching their stated priority.
“Non-GAAP gross margin of 63.4% in Q2 2026.”
“Non-GAAP gross margin of 62.4% in Q1 2026.”
“Non-GAAP gross margin of 63.4% in Q4 2025.”
“Non-GAAP gross margin of 65.2% in Q3 2025.”
“Non-GAAP gross margin of 65.6% in Q2 2025.”
“Non-GAAP gross margin of 64.1% in Q1 2025.”
“Non-GAAP gross margin of 64.2% in Q4 2024.”
Breaks if: Operating margin falls below 44% next quarter
Sustain non-GAAP gross margins around 63-65% despite market and supply challenges.
Stated as a priority in 7 of last 7 quarters. Non-GAAP gross margins have been stable around 63-65%, with 63.4% in 2026-Q2 and 62.4% in 2026-Q1. Management's guidance and results show consistent delivery of strong gross margins, matching their stated priority.
“Non-GAAP gross margin of 63.4% in Q2 2026.”
“Non-GAAP gross margin of 62.4% in Q1 2026.”
“Non-GAAP gross margin of 63.4% in Q4 2025.”
“Non-GAAP gross margin of 65.2% in Q3 2025.”
“Non-GAAP gross margin of 65.6% in Q2 2025.”
“Non-GAAP gross margin of 64.1% in Q1 2025.”
“Non-GAAP gross margin of 64.2% in Q4 2024.”
Breaks if: Revenue falls below ~$2.6B next quarter
In the next 1-3 years, ANET's performance will depend on its ability to sustain growth and manage market expectations. Not investment advice.