Shares in Arista Networks fell for a second day after Nvidia announced that Oracle and Meta Platforms will use its Spectrum-X Ethernet networking devices in next-generation data centers for artificial intelligence computing. Arista stock is up some 33% in 2025 but has retreated from a record high set last week.
Nvidia announced on Monday that OpenAI and Meta will adopt its Ethernet networking architecture for AI data centers.
Arista's two biggest customers for computer network switches have been Microsoft and Facebook parent Meta. Oracle has been viewed as a potential new customer. Oracle has signed massive AI infrastructure deals with OpenAI and others.
AI Networking Battle
Both Arista and Nvidia are targeting an emerging market for "back-end" Ethernet networking technology that connects the clusters of AI servers in cloud-computing data centers. Nvidia bundles its Spectrum-X networking devices with AI accelerators, giving it a potent marketing strategy. Nvidia also makes InfiniBand networking chips built into high-performance computers.
At an analyst day in September, Arista forecast 20% revenue growth in fiscal 2026 to $10.5 billion, slightly above consensus estimates. Also, Arista predicted that its AI networking revenue will grow 70% in 2026 to around $2.75 billion, up from $1.5 billion this year.
Third-quarter earnings for Arista stock are due Nov. 4. The company could update guidance.
Arista sells computer network switches that speed up communications in internet data centers. Further, its chief rivals are Cisco Systems and Hewlett Packard Enterprises, which acquired Juniper Networks. Another competitor is contract manufacturer Celestica.
Arista Stock Extends Slide
On the stock market today, Arista stock fell 5.8% to near 139 in morning trading, partly due to a broad market decline. Arista stock fell 4.3% on Monday, even though the Nasdaq composite rebounded 2.2%. Arista stock hit a record high of 162.68 in intraday trading on Oct. 10 before reversing lower.
Shares are now approaching the 10-week and 50-day lines. Arista is among AI stocks to watch.
Meanwhile, Nvidia stock rose 2.8% to 188.32 on Monday, back in a buy zone. Nvidia stock has gained 36% in 2025.
Arista Technical Ratings
ANET stock holds a best-possible IBD Composite Rating of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Meanwhile, Arista stock has an Accumulation/Distribution Rating of B, according to IBD MarketSurge analysis. That rating indicates heavy institutional buying of ANET stock.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
