Arista Networks (ANET) shares rose about 5% on Wednesday, Nov. 4, after the company reported better-than-expected third-quarter earnings and issued an upbeat forecast for the current quarter.
The results showed that demand for networking equipment remains strong as technology companies continue spending billions of dollars on AI data centers.
Arista reported adjusted earnings of $1.20 per share, beating analysts’ expectations of $1.08. Revenue came in at $3.66 billion, above Wall Street’s forecast of $3.33 billion.
“Arista registered another momentous quarter with the highest year-over-year revenue growth since our IPO and record profitability, surpassing even my high expectations,” said CEO Jayshree Ullal in the earnings release.
“This strong momentum across customer sectors highlights our increased relevance for the generative and agentic AI era.”
Arista makes networking equipment and software that help computers and servers communicate with one another. Its major customers include Microsoft and Meta Platforms, which use its technology in their massive data centers.
As these companies build larger AI systems, they need faster networks to move data between chips and servers, creating more business for Arista.
The company expects fourth-quarter adjusted earnings of $1.26 to $1.30 per share on revenue of $3.9 billion to $4.0 billion. Analysts had expected earnings of $1.15 per share and revenue of $3.60 billion.
Arista also projected an adjusted operating margin of 48% to 49%.
Year to date, Arista stock is up roughly 36%.
Wall Street raises Arista Networks stock price targets
Several Wall Street analysts raised their price targets on Arista after the earnings report, with much of the optimism centered on the company’s growth outlook for 2027.
UBS analyst David Vogt raised his price target to $291 from $259 and maintained a Buy rating, The Fly reported.
Vogt said Arista delivered a strong quarter and raised its 2026 outlook. He was particularly encouraged by management’s initial 2027 revenue growth forecast of 38% to 40%, which significantly exceeded expectations.
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The analyst attributed the stronger outlook to rising demand for networking equipment that connects AI servers within data centers and across larger computing systems.
Piper Sandler analyst James Fish raised his price target to $261 from $240 and maintained an Overweight rating.
Fish, who considers Arista a top pick, said the company delivered one of its largest earnings beats in recent years while maintaining strong profitability.
He also pointed to management’s 2027 outlook as evidence that revenue growth of roughly 40% could continue.
Wells Fargo lowered its Arista stock price target to $245 from $255 but maintained an Overweight rating. The firm expects investors to focus on the potential for further earnings upside as Arista increases supply to meet strong demand.
Jim Cramer sees Arista as a potential new tech market leader
CNBC’s Jim Cramer recently suggested that a new group of technology stocks could be emerging as market leaders.
Cramer said on Nov. 3 that some of the biggest technology companies, including Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOGL), and Meta Platforms (META), have struggled to sustain rallies in recent weeks.
“Tech’s trying to make a stand here. It’s just not the tech that’s led us for the last few years,” Cramer said.
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Cramer highlighted Arista and Advanced Micro Devices (AMD), both of which reported strong quarterly results on Nov. 3, as companies that could help lead the technology sector’s recovery.
“I want to believe that non-magnificent tech can lead us,” Cramer said. “But I also know that there are concerns we must be aware of before we get too cocky about one session’s set of positives.”
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