Business Description
Arista Networks, Inc. is a leading global technology firm that designs, promotes, and distributes innovative cloud networking solutions across the Americas, Europe, the Middle East, Africa, and Asia-Pacific regions. Its comprehensive product portfolio features advanced extensible operating systems, a collection of powerful network applications, and high-performance gigabit Ethernet switching and routing hardware. The company also offers robust post-contract customer support, which includes technical assistance, hardware repairs, parts replacement beyond standard warranty, and critical bug fixes, patches, and upgrades. Arista serves a diverse clientele, encompassing major internet companies, telecommunication providers, financial services organizations, government agencies, and entities in the media and entertainment sectors. Its sales strategy involves multiple channels, utilizing distributors, system integrators, value-added resellers, original equipment manufacturer partners, and a dedicated direct sales force. Established in 2004 as Arastra, Inc., the company adopted the name Arista Networks, Inc. in October 2008 and is headquartered in Santa Clara, California.
Business History
Generated: Jun 26, 2026 3:15amPrice Overview
Last updated: Jun 26, 2026 3:12am (1d ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 2.79
Total Equity: $12.37B
Shares: 1,275,700,000
Total Debt: $0.00
Cash: $1.96B
EBITDA: $4.32B
Total Debt: $0.00
Cash: $1.96B
Revenue: $9.01B
Revenue: $9.01B
Revenue: $9.01B
Total Equity: $12.37B
Tax Rate: 17.4%
Equity: $12.37B
Total Debt: $0.00
Cash: $1.96B
Current Liabilities: $5.38B
Long-Term Debt: $0.00
Total Debt: $0.00
Total Equity: $12.37B
Shares: 1,275,700,000
Shares: 1,275,700,000
CapEx: -$119.50M
Shares: 1,275,700,000
Stock Price: $165.45
Net Income: $3.51B
Industry Benchmarks
Advanced Analysis Forensic deep-dive · three lenses
The financial trajectory is exceptional. Revenue compounded from $2.95B (2021) to $9.01B (2025), roughly 3x in four years, while operating margin expanded from 31.4% to 42.8% and gross margin held at 64%+. Net income scaled from $841M to $3.51B and FCF from $951M to $4.25B, with OCF/NI at 1.02x confirming that earnings convert cleanly to cash. This is operating leverage on top of premium gross margins, which is the signature of a differentiated product franchise (high-end cloud/AI data-center switching with EOS software).
Verify before trusting this (6)
- 10-K customer concentration disclosure - what % of revenue from top 2-3 hyperscalers and trajectory
- AI/cloud backlog and deferred revenue trends to confirm growth durability beyond 2025
- Whether insider sales are under 10b5-1 plans (Form 4 footnotes) vs discretionary
- Inventory and supply commitments - given hardware mix, check for inventory write-down risk
- Segment/product mix shift toward software/services and impact on long-term gross margin
- Competitive position vs Cisco, Nvidia (Spectrum-X), and white-box vendors in AI back-end networking
The composite fair value of $58 and signal-adjusted $66 imply roughly 60% downside, but those marks lean heavily on an EPV floor of $17 that ignores the AI capex super-cycle and a DCF of $65 that likely uses conservative growth fade. Even crediting the Fortress quality grade (64% gross, 40%+ op margins, $4.25B FCF, zero debt, flat share count) and bumping deserved value materially above those models, a reasonable quality-adjusted fair value lands somewhere in the $110-$135 range on 18-20x forward EBIT with a generous AI growth runway. Against $165 and a $208B market cap, that is a 20-35% premium, not a bargain.
Verify before trusting this (4)
- Forward guidance on AI-driven revenue mix and 2025-2026 growth durability
- Gross margin trajectory as hyperscaler mix grows (pricing pressure signal)
- Customer concentration disclosures - Meta and Microsoft share of revenue
- Any commentary on Broadcom Tomahawk/Jericho competitive wins/losses
The active story on ANET is platform-monopoly plus AI infrastructure capture - one of the most powerful narratives in the market right now. News flow in the last 72h reinforces it: 1.6T platform launch, KeyBanc raising PT to $200, Zacks highlighting it alongside Micron as an AI beneficiary, and a 'balance sheet foretold the AI boom' retrospective. Analyst tone is backward-looking but still ratcheting up (3 revisions this month averaging $188, consensus $185 vs $165 spot), and that divergence is upward, not downward - tape is catching up to the story, not fading it.
Verify before trusting this (4)
- Any hyperscaler capex guide-down or AI-pause headline (would crack the narrative core)
- Broadcom/Nvidia networking share-gain commentary that validates the bear case
- Whether the Cisco AI-margin story migrates into ANET coverage
- VIX break above 22 or S&P -5% drawdown - high beta would amplify
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 26, 2026 3:16am (1d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $2.9B | $4.4B | $5.9B | $7.0B | $9.0B |
| Cost of Revenue | $1.1B | $1.7B | $2.2B | $2.5B | $3.2B |
| Gross Profit | $1.9B | $2.7B | $3.6B | $4.5B | $5.8B |
| Operating Expenses | $956.0M | $1.1B | $1.4B | $1.5B | $1.9B |
| Operating Income | $924.7M | $1.5B | $2.3B | $2.9B | $3.9B |
| Net Income | $840.9M | $1.4B | $2.1B | $2.9B | $3.5B |
| EBITDA | $981.2M | $1.6B | $2.5B | $3.3B | $4.3B |
| EPS | $0.69 | $1.10 | $1.69 | $2.27 | $2.79 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 26, 2026 3:12am (1d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $620.8M | $671.7M | $1.9B | $2.8B | $2.0B |
| Total Current Assets | $4.8B | $5.6B | $8.4B | $11.9B | $16.4B |
| Total Assets | $5.7B | $6.8B | $10.0B | $14.0B | $19.4B |
| Current Liabilities | $1.1B | $1.3B | $1.9B | $2.7B | $5.4B |
| Long-Term Debt | $0 | $0 | $0 | $0 | $0 |
| Total Liabilities | $1.8B | $1.9B | $2.7B | $4.0B | $7.1B |
| Total Equity | $4.0B | $4.9B | $7.2B | $10.0B | $12.4B |
| Retained Earnings | $2.5B | $3.1B | $5.1B | $7.5B | $9.4B |
Cash Flow (Annual)
Last updated: Jun 23, 2026 3:03am (4d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $1.0B | $492.8M | $2.0B | $3.7B | $4.4B |
| Capital Expenditure | -$64.7M | -$44.6M | -$34.4M | -$32.0M | -$119.5M |
| Free Cash Flow | $951.1M | $448.2M | $2.0B | $3.7B | $4.3B |
| Acquisitions (net) | -$19.9M | -$145.1M | $1.8M | $0 | -$300.0M |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$411.6M | -$670.3M | -$112.3M | -$423.6M | -$1.6B |
| Net Change in Cash | -$272.4M | $50.9M | $1.3B | $824.3M | -$798.5M |
Analyst Estimates (Annual)
Last updated: Jun 26, 2026 3:12am (1d ago)| Metric | 2026 | 2027 | 2028 | 2029 |
|---|---|---|---|---|
| Revenue |
$11.6B $11.5B – $11.7B
|
$14.4B $13.7B – $15.1B
|
$17.3B $17.2B – $17.3B
|
$21.5B $20.8B – $22.7B
|
| EBITDA |
$7.3B $7.2B – $7.4B
|
$9.0B $8.6B – $9.5B
|
$10.8B $10.8B – $10.9B
|
$13.5B $13.1B – $14.3B
|
| Net Income |
$4.6B $4.5B – $4.8B
|
$5.7B $5.3B – $6.1B
|
$6.3B $5.9B – $7.7B
|
$9.0B $8.7B – $9.7B
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 26, 2026 3:16am (1d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +48.6% | +33.8% | +19.5% | +28.6% |
| Gross Profit Growth | +42.3% | +35.7% | +23.7% | +28.4% |
| Operating Income Growth | +65.1% | +47.8% | +30.5% | +31.0% |
| Net Income Growth | +60.8% | +54.3% | +36.6% | +23.1% |
| EBITDA Growth | +67.6% | +51.6% | +33.5% | +29.9% |
Insider Trading (Recent)
Last updated: Jun 26, 2026 3:16am (1d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-22 | Duda Kenneth | M-Exempt | 17,333.00 | $15.28 | $264,795 |
| 2026-06-22 | Duda Kenneth | S-Sale | 406.00 | $167.35 | $67,943 |
| 2026-06-22 | Duda Kenneth | S-Sale | 1,683.00 | $168.63 | $283,808 |
| 2026-06-22 | Duda Kenneth | S-Sale | 4,187.00 | $169.39 | $709,228 |
| 2026-06-22 | Duda Kenneth | S-Sale | 1,619.00 | $170.37 | $275,824 |
| 2026-06-22 | Duda Kenneth | S-Sale | 1,445.00 | $171.49 | $247,798 |
| 2026-06-22 | Duda Kenneth | S-Sale | 850.00 | $172.32 | $146,475 |
| 2026-06-22 | Duda Kenneth | S-Sale | 2,145.00 | $173.69 | $372,573 |
| 2026-06-22 | Duda Kenneth | S-Sale | 3,590.00 | $174.37 | $625,983 |
| 2026-06-22 | Duda Kenneth | S-Sale | 75.00 | $175.04 | $13,128 |
| 2026-06-22 | Duda Kenneth | S-Sale | 254.00 | $167.35 | $42,506 |
| 2026-06-22 | Duda Kenneth | S-Sale | 1,052.00 | $168.63 | $177,401 |
| 2026-06-22 | Duda Kenneth | S-Sale | 2,617.00 | $169.39 | $443,289 |
| 2026-06-22 | Duda Kenneth | S-Sale | 1,012.00 | $170.37 | $172,411 |
| 2026-06-22 | Duda Kenneth | S-Sale | 903.00 | $171.49 | $154,852 |
| 2026-06-22 | Duda Kenneth | S-Sale | 531.00 | $172.32 | $91,504 |
| 2026-06-22 | Duda Kenneth | S-Sale | 1,341.00 | $173.69 | $232,923 |
| 2026-06-22 | Duda Kenneth | S-Sale | 2,244.00 | $174.37 | $391,283 |
| 2026-06-22 | Duda Kenneth | S-Sale | 46.00 | $175.04 | $8,052 |
| 2026-06-22 | Duda Kenneth | M-Exempt | 17,333.00 | $15.28 | $264,795 |
Narrative Economics
market-narrative step).
Delvantic AI Findings
Looking at the raw numbers first: revenue went from $1.69B in Q2'24 to $2.71B in Q1'26 — that's 60% growth in seven quarters, with the most recent YoY at 35% (Q1'26 vs Q1'25: $2.71B vs $2.00B). Net margin has actually compressed modestly from a peak of 41.5% in Q4'24 to 37.8% in Q1'26 — small, but the direction matters at 18x sales. Gross margin at 64% on networking hardware is genuinely extraordinary and tells you Arista is selling software-locked-in boxes, not switches. FCF of $4.25B on $9.01B revenue = 47% FCF margin, and capex is a rounding error ($119M). Balance sheet is fortress-grade: $1.96B cash, current ratio 3.05, presumably no meaningful debt. ROIC 22% is real. This is one of the highest-quality hardware businesses ever assembled.
That said, the valuation math is brutal and the synthesis is directionally right. At $208B market cap on $9B revenue and ~$3.5B net income, you're paying 56x earnings and 18x sales for a company whose revenue growth, while still 28%+ YoY recently, is decelerating from the AI-fueled peak. The synthesis fair value of $66 looks too pessimistic to me — it implies the market is paying ~2.5x fair value for one of the five best businesses in tech infrastructure, which historically that kind of quality earns *some* premium. But $165 is also too rich. Reverse-DCF: to justify $165 with a 10% discount rate and 20x terminal FCF multiple, you need roughly 18-20% FCF growth for a decade. Possible, but Arista's customer concentration (Meta + Microsoft ~40% of revenue historically) makes that a bet on two capex budgets, not a diversified franchise. The narrative layer correctly flags this as "platform-monopoly" framing — but Arista *is* a hardware vendor to four customers, no matter how good EOS is.
Where I'd push back on the prior models: the pre-flight and market-forces calls lean heavily on "insiders selling heavily" and "hyperscaler vertical integration" as bear catalysts, but the insider activity shown is small (<35k shares across the cluster, mostly 10b5-1 mechanical sales after option exercise — the M-Exempt + S-Sale pattern is textbook). That's not a smoke signal. The real bear case the models underweight is simpler: Broadcom's Tomahawk 5/Jericho3-AI silicon is what Arista *resells in a box* — Arista's moat is EOS software and systems integration, not silicon. If hyperscalers continue pushing SONiC and white-box deployments (Meta has been explicit about this for years), Arista's 64% gross margin is the asset most at risk, not revenue. A 500bps GM compression on $9B is $450M of gross profit — that alone would re-rate the multiple. The contrarian case nobody made: Arista's Q1'26 sequential acceleration ($2.71B vs $2.49B, +8.8% QoQ) suggests AI buildout is still front-loading, not decelerating — the "peak capex" thesis may be 6-8 quarters early. If 2026 revenue lands at $11.5-12B with margins holding, the forward P/E drops to ~45x, which is rich but not absurd for this growth profile.
My verdict: I agree directionally with the synthesis (overvalued) but think $66 fair value is mechanically conservative — it punishes the multiple without giving credit for 22% ROIC, 47% FCF margins, and demonstrated execution. Fair value is more like $95-110 (roughly 30-35x forward earnings on ~$3.5-4 EPS, a quality premium but not a hype premium). At $165 you're paying ~50-70% above what I'd consider defensible, and the asymmetry is bad: upside requires sustained 25%+ growth into 2027-2028 (possible but not probable given hyperscaler digestion cycles); downside on any AI capex pause or GM compression takes you to $100 fast. The data anomaly flags are immaterial here — TTM vs annual is a rounding issue at this multiple. Sector leader, yes. Bargain, no. Quality trap risk is real for anyone buying here.
GPT Critique
Arista Networks, Inc. is undoubtedly a standout in the hardware sector, demonstrating impressive growth with revenue ballooning from $1.69B in Q2 2024 to $2.71B in Q1 2026. This is a 60% increase over seven quarters, underscoring a robust demand for their offerings, especially with their extraordinary gross margins of 64%. The free cash flow margin of 47% and an operating cash flow of $4.37B on a $9.01B revenue base further underline the company's exceptional financial health. The balance sheet, bolstered by $1.96B in cash and no debt, paints a picture of a company in a very strong position to navigate market challenges.
Where I diverge from the Delvantic AI Findings, primarily authored by Claude Opus, is the interpretation of the valuation. Opus pegs Arista as overvalued, suggesting a fair value of $95-110, whereas they argue the current price of $165.45 is too steep. While I concur with the overvaluation sentiment, I believe that the $66 fair value proposed by the synthesis is overly pessimistic. Arista's ability to maintain a high ROIC of 22% and operate without any meaningful debt suggests a company that deserves a premium, albeit not as high as the current market price.
Opus highlights the insider activity as a non-factor, describing it as predominantly mechanical and not indicative of significant insider sentiment shifts, which I agree with. However, I'm less convinced by the heavy reliance on hyperscaler vertical integration as a primary risk factor. Instead, the competitive threat from companies like Broadcom and the potential industry shift towards white-box solutions pose more immediate risks to Arista's margins. This is especially pertinent considering Arista's reliance on software differentiation over silicon advantage, and the potential margin compression could indeed trigger a re-rating of their stock.
A skeptic might argue that our analyses underplay the potential growth trajectory of AI and cloud infrastructure, which could sustain Arista's growth rates longer than anticipated. They could also argue that the competitive pressures from Broadcom and others might be overstated, given Arista's strong relationships with major hyperscalers and the unique value proposition of its EOS software.