Arista Networks reported second quarter earnings and revenue that topped Wall Street targets. Arista stock rallied Wednesday after the company raised 2025 guidance amid a capital spending boom at cloud computing companies.
The maker of cloud computer networking gear reported its results after the market close on Tuesday. For the three months ended June 30, Arista earnings rose38% to 73 cents per share on an adjusted basis. Revenue jumped 30% to $2.205 billion.
Analysts estimated Arista earnings of per share of 65 cents on an adjusted basis with revenue of $2.11 billion.
For the current quarter ending Sept. 30, Arista predicted revenue of $2.25 billion at the midpoint of guidance, edging by estimates of $2.12 billion. The company raised 2025 revenue growth guidance to 25% from 17%, including recently acquired VeloCloud.
Cisco Systems, Juniper Rivals
Arista sells computer network switches that speed up communications in internet data centers. Further, its chief rivals are Cisco Systems and Juniper Networks. Another competitor is contract manufacturer Celestica.
Arista's two biggest customers remain Microsoft and Facebook parent Meta Networks. In 2024, Arista garnered about 20% of 2024 revenue from Microsoft and just under 15% from Meta.
Meta's 2025 capital spending is expected to boom 82% to around $68 billion. Microsoft's capital spending is projected to jump 40% to over $105 billion.
For 2025, Arista has been projecting $1.5 billion in artificial-intelligence-related revenue. That would come from both "front end" network switches as well as "back-end" Ethernet networking technology that connects the clusters of AI servers in cloud-computing data centers.
Arista Stock: 2026 Outlook In Focus
"Management sees upside to its $1.5 billion target for AI revenues on the strength of its four big cloud AI customers and the combined contribution from 25 to 30 enterprise and neocloud AI customers, while strong demand in the core front end of the market is also supporting 25% growth in 2025," said Citi analyst Atif Malik in a report.
At Barclays, analyst Tim Long said in a report: "We now model 25.3% revenue growth for 2025 and 17% for 2026, bringing Arista to over $10 billion in revenues for the year. 2026 is poised to be another strong year given the company's visibility and the growing deferred revenue balance."
UBS analyst David Vogt also focused on the 2026 outlook.
"Management did note they are on track to hit $10 billion in revenue next year, two years ahead of schedule," Vogt said in a report. "More cautious investors will worry $10 billion only equates to 14% to 15% growth next year, a sharp deceleration from the 25% guide in 2025. However, we note that Arista management tends to set a conservative guide early in the planning process and has consistently delivered upside to the initial outlook."
On the stock market today, Arista stock climbed over 12% to 133.15 in early trading. Arista is among artificial intelligence stocks to watch.
Arista plans to host an investor day on Sept. 11.
Heading into the Arista earnings report, shares had advanced 6% in 2025. One drag on Arista stock has been investor concern that it's losing back-end AI networking share to Nvidia. Another worry has been that Celestica is gaining business at Meta.
Arista Stock Technical Ratings
Further, ANET stock holds a Composite Rating of 98 out of a best-possible 99, according to IBD Stock Checkup.
Meanwhile, Arista stock has an Accumulation/Distribution Rating of B-plus, according to IBD MarketSurge analysis. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
