Arista Networks reported first quarter earnings and revenue that topped Wall Street targets. The company's June quarter guidance for Arista stock came in above views. However, management maintained full-year guidance at the same levels, citing the possible impact of Trump administration tariffs on contract manufacturers.
The maker of cloud computer networking gear reported its results after the market close on Tuesday. For the three months ended March 31, Arista earnings rose 30% to 65 cents on an adjusted basis. Revenue jumped more than 27% to $2.005 billion.
Analysts estimated Arista earnings per share of 59 cents on an adjusted basis with revenue of $1.967.4 billion.
Cautious Guidance Amid Possible Tariff Impact
For the current quarter ending June 30, Arista predicted revenue of $2.1 billion at the midpoint of guidance, edging by estimates of $2.026 billion. But Arista maintained its full-year 2025 guidance.
"Despite fundamental demand that remains strong, with most cloud operators reiterating or raising their 2025 capex plans, management cautioned for potential lumpiness as tariff uncertainty reduces visibility," said Simon Leopold, analyst at Raymond James in a report.
Arista's contract manufacturers are based in Mexico and southeast Asia.
"While Arista is exempt from most non-China tariffs until July 9, there is some small tariff impact to margins related to China exposure," said Morgan Stanley analyst Meta Marshall in a report. "The Company is absorbing tariffs into gross margins and may need to pass on tariff increases to customers in the future, if they can't move production around quickly enough."
Also, the company repurchased $787 million of its own stock in the first quarter.
Cisco Systems, Juniper Rivals
"Revenue guidance for the second quarter was also nicely ahead of consensus, calling for 25% growth in what management views as an unseasonably strong second quarter," said William Blair analyst Sebastien Naji in a report "Despite robust first-half growth, Arista reiterated its full-year revenue growth guidance of 17%, implying a steep fall-off in growth in the second half. Management was clear that given its momentum in enterprise and good visibility within its cloud titan customers that extends through the end of 2025, were it not for the tariff uncertainty, it would be more bullish going into the second half of 2025."
Arista sells computer network switches that speed up communications in internet data centers. Further, its chief rivals are Cisco Systems and Juniper Networks.
Cisco reports earnings on May 14. The Department of Justice aims to block Hewlett Packard Enterprises's acquisition of Juniper.
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.
For 2025, Arista has been projecting $750 million in artificial-intelligence-related revenue. Most of that is expected to come from Ethernet networking technology that connects the clusters of AI servers in cloud-computing data centers.
On the stock market today, Arista stock fell 5% to 86.18 in early trading. Arista is among artificial intelligence stocks to watch.
Heading into the Arista earnings report, shares were down about 18% in 2025.
Arista Stock Technical Ratings
Further, ANET stock holds a Relative Strength Rating of 60 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.
