ANET

ANET +25% and HPE/JNPR +13%, but intentions fell sharply from +57% as macro pressure builds. Project delays rose to 13% from 2%, macro-impacted orders to ~20% from ~12%, and 40% of CIOs say further pricing increases would delay purchases; campus is the main...

JPM sees networking as an increasingly critical gating factor in AI data center infrastructure, which favors Arista Networks alongside other compute and foundry beneficiaries.

Arista Networks remains positive in networking growth expectations, with a +28% increase in 3-year net spending intentions.

CSCO/ANET remain positive at +28%/+25%, but macro pressure is worsening as affected orders rise to ~20% from ~12% and project delays to 13% from 2%.

Oracle could exceed the 10% customer threshold in 2026 as Stargate ramps, with tier-2 cloud already contributing significantly to revenue.

Google is emerging as a significant customer through scale-out/scale-across, potentially becoming a 10% customer over time, and AI labs offer significant longer-term upside with multi-GW deployments ramping.

The Etherlink SU-144 launch extends Ethernet into scale-up, opening a ~$10B 2027 total addressable market and broadening AI exposure beyond scale-out/scale-across.

The Etherlink SU-144 launch is evidence that the company is helping drive the emerging ESUN standard, with Microsoft collaborating on Maia scale-up.

The new Etherlink architecture significantly expands the AI networking opportunity by extending Ethernet into scale-up, supporting a large number of XPUs across racks.

Next-generation optics are expected to substantially increase capacity and reduce data center footprint.

Flexible designs supporting multiple accelerator ecosystems strengthen the company's ability to serve various scale-up/scale-out needs.

Evercore says ANET’s new Etherlink architecture extends Ethernet into scale-up, supporting 144 XPUs single-hop and 1,024 cross-rack, while next-gen optics lift capacity ~4x to 6.5 Pb/s/rack and cut DC footprint ~50%. Flexible designs spanning AMD/Arm/Broadc...

The company is gaining share in AI back-end switching as the industry shifts from InfiniBand to Ethernet.

Networking/connectivity names, including ANET, should benefit as disaggregated inference drives more east-west traffic.

SNDK is viewed as the clearest beneficiary as KV cache and suspended agent state spill into flash, while WDC/STX benefit from logs/traces, P/NTAP from enterprise context storage, and DELL/HPE from higher CPU/DRAM/NAND content. Networking/connectivity names...

Conversations with various companies consistently indicated strong AI infrastructure demand despite ongoing debates about AI regulation.

Memory and storage demand continues to exceed supply.

Agentic CPU demand is expected to broaden from head nodes and traditional servers in 2027 to sandbox workloads in 2028, benefiting next-generation Vera, Venice, and Diamond Rapids CPUs.

CXL is gaining traction, with CXL 2.0 ramping at Meta and Microsoft, and CXL 3.0 being crucial for broader adoption.

BNP Paribas says conversations across AMD, ANET, AMZN, AVGO, NVDA and others consistently pointed to AI infrastructure demand remaining strong despite calls for tighter AI regulation.

Evercore ISI believes the explosion of AI-driven vulnerabilities strengthens the security/networking convergence thesis, as human-only remediation becomes untenable and demand for AI-native security accelerates.

Evercore ISI argues that agents themselves increasingly need to be treated as internal threats, favoring zero-trust architectures and strengthening ANET's positioning as EOS/CloudVision converges networking, observability, and security.

ISI also states that open-source models could reach Anthropic Mythos-like cyber capabilities within approximately 3 months and reiterated an Outperform rating with a $250 price target.

Evercore ISI says Anthropic found ~23K open-source vulnerabilities in a single month, rising to ~37K including PANW findings, making human-only remediation increasingly untenable and accelerating demand for AI-native security. Evercore ISI argues agents the...

The company maintains strong guidance and has seen a significant increase in purchase commitments, indicating robust long-term demand.

The guide raise was attributed to supply-chain work and two quarters of purchase order visibility by August, indicating improved operational clarity and demand forecasting.

The near-tripled $9.7bn of purchase commitments is a strong demand signal, not merely inflation, suggesting robust customer interest.

Scale-across accounts for about 30% of this year’s $3.5bn AI target because customers require distributed power, indicating a significant and growing AI opportunity.

The price increase was specifically curated for memory-heavy bills of material on future purchase orders and is intended to be margin-neutral, demonstrating strategic pricing without impacting profitability.

Arista's EOS software moat and strong exposure to AI and campus networking support a robust revenue CAGR through FY29.

AI revenue is projected to be substantial, with campus revenue also strong, and scale-up networking providing additional optionality.

The company is a key beneficiary of the broadening optical scale-up in AI networking.

224G/lane SerDes and larger switch radix are supporting continued scale-up/scale-out growth.

BNP also sees 224G/lane SerDes and larger switch radix supporting continued scale-up/scale-out growth for AVGO/ANET, while optical engine standardization favors MRVL, LITE, COHR and MTSI.

Piper Sandler reports that management is highly confident in hyper-growth persisting into 2027, with a recent 40% growth guide raise driven primarily by improved supply, leaving room for further upside if constraints ease.

Scale-across solutions already account for approximately one-third of AI revenue and could become a major growth driver as hyperscalers require more Ethernet connectivity for larger GPU clusters.

Enterprise share gains are building from the Mythos refresh and go-to-market improvements.

Arista Networks could have 3-4 customers each exceeding 10% of revenue this year, compared to historically only Microsoft and Meta.

Arista is flagged as a key networking partner for Cerebras as it scales rack-level deployments, indicating its importance in the expanding AI infrastructure.

Funda says scale-across has moved from concept to commercial reality, expanding the AI networking TAM, with Arista sizing the market at $15–20B by 2030 including optics.

Arista expects roughly $1.1B of 2026 AI revenue from the scale-across category.

Coherent-lite should become increasingly important from late 2027/2028 as 1.6T/3.2T links push coherent optics closer to and inside the data center.

BNP reiterated Outperform and raised its price target to $248 from $200, stating that Arista’s FY26 growth guide of roughly 40% is driven by stronger demand and improved supply rather than deferred-revenue recognition.

Record deferred revenue, pre-purchase commitments up 3x year-over-year, and increasing AI sales mix support further upside.

Price increases implemented in 1Q26 should begin flowing through in late 2026/early 2027.

BNP sees Arista’s 7800 platform taking roughly 50% of scale-across share in CY26 and expects optics to become a meaningful growth vector as CPO adoption ramps in CY28–29.

Compare that with the anemic follow-through in AI Semis: ANET following its big beat, STX, or ALAB selling off despite the big Sept Q guide. The weaker prints like INTC and SNDK also continue to struggle to find a bid.

The company is becoming the central networking control point for AI infrastructure, with broad-based demand across AI fabrics, enterprise, and campus networking.

The company delivered strong results, exceeding expectations.

The company reported a significant beat and raise, with revenue accelerating year-over-year and operating margins approaching 50%.

The Q3 revenue guidance implies further acceleration in growth and significantly exceeded both Street and buy-side expectations, with EPS also substantially above estimates.

This quarter marked the largest revenue beat since October 2022, and the acceleration in revenue growth is a positive sign for bullish investors.

Despite the stock already trading at 52-week highs and being a crowded long position, the company delivered strong results.

Post-close ANET/ALAB delivering the goods while fell AMD short of bogeys. These comments from Elon have NVDA +1% in the post:

Evercore added the company to its Tactical Outperform list with a price target of $200, expecting a 2Q beat and above-Street 3Q guide due to strengthening AI demand and durable enterprise momentum.

Evercore believes the company could raise its FY26 revenue target due to increasingly complex AI networks, front-end and campus deployments, and growing traction with Anthropic and Google.

Evercore highlights scale-across networking as an underappreciated opportunity, with the company positioned as a preferred partner for neoclouds including xAI, OpenAI, and Anthropic.

Wells Fargo raised its price target to $200 from $185 and recommended buying ahead of 2Q, expecting continued demand strength and improved supply visibility to support an increase in 2026 revenue guidance.

Wells Fargo sees potential for growth to exceed 35% given contractual commitments, pricing increases, traditional server CPU demand, and scale-up revenue ramping in 2027.

Customer diversification remains a catalyst, with the company expected to add one to two new 10%+ customers in 2026, and recent supply concerns are viewed as overdone.

The stock is performing strongly, reaching 52-week highs, indicating positive market sentiment.

JPM argues the company's competitive advantage is shifting towards AI networking software, with EOS capabilities and its new MultiPath Reliable Connection (MRC) protocol helping Ethernet scale AI clusters and narrow the gap with proprietary interconnects.

The company's 1.6T roadmap and multi-plane network architecture can support large AI clusters with greater resilience and lower cost.

The combination of next-generation hardware and differentiated software reinforces the company's leadership with hyperscalers, supporting continued market-share gains.

Investor concerns regarding supply constraints and deferred revenue have largely been resolved, clearing the path for sustained growth.

Multiple AI catalysts, including 1.6T networking, accelerating XPU deployments, and emerging inference-driven demand in enterprise datacenters, are expected to drive upside beyond current expectations.

The company is expected to sustain strong revenue growth in 2026 and 2027, as the market is underappreciating the durability of AI-driven demand and its earnings power.

Orders from enterprise customers are improving, though some hyperscaler orders are limited by supply.

Wells Fargo believes Qualcomm’s newly unveiled Dragonfly AI rack architecture may use Arista switches for scale-out networking, creating another potential AI infrastructure opportunity for the company.

The firm highlighted Arista’s increasing focus on tightly integrated rack-scale AI systems and views the company’s 1.6T platform as well positioned as customers move toward more integrated AI architectures.

While Qualcomm has provided limited details and the opportunity remains unconfirmed, Wells Fargo sees the setup as incrementally positive and another example of Arista expanding beyond traditional switching into broader rack-scale AI deployments.

ISI argues the market is materially underestimating Arista’s opportunity with Anthropic, viewing it as both a meaningful customer diversification story and a multi-billion-dollar revenue opportunity.

The firm estimates Anthropic’s planned 3GW compute buildout could drive more than $3 billion of incremental revenue for Arista through CY28, supported by Anthropic’s use of a heterogeneous architecture that requires high-performance Ethernet networking.

ISI believes Arista’s EOS software, scale-out networking leadership, and ability to connect diverse compute fabrics make it particularly well positioned as Anthropic scales.

Beyond the direct revenue opportunity, the relationship with Anthropic helps reduce Arista’s dependence on Microsoft and Meta.

Wolfe is more constructive on the datacenter switching outlook, as the industry increasingly prioritizes GPU utilization and token economics, favoring best-of-breed networking solutions over bundled offerings.

Improving utilization rates can lead to significant savings for hyperscalers, neoclouds, and model builders, increasing their willingness to adopt best-of-breed networking solutions.

The emergence of heterogeneous AI clusters and non-Nvidia accelerators is positive for the company due to its strength in both training and inference environments.

JPM reiterated its bullish view, arguing the company is entering the next major Ethernet upgrade cycle from a position of strength with its 1.6T switching platform.

The company is seeing strong engagement from hyperscalers, including Microsoft, Meta, Oracle, and cloud AI customers, viewing 1.6T as the first production-ready Ethernet solution for the rack-scale AI era.

Its liquid-cooled architecture, merchant-silicon strategy, and leadership in scale-out networking position it well as AI clusters become larger and more distributed.

There is growing evidence that 1.6T deployments are becoming real customer opportunities, with management discussing multiple rack-scale opportunities starting in 2027.

ANET: JPM Says 1.6T Marks the Beginning of the Next Ethernet Upgrade Cycle

The company outperformed as Wolfe became more positive on ANET’s data center switching outlook, arguing that the industry's focus on GPU utilization and token economics benefits ANET.

JPM argues ANET’s medium-term thesis remains intact, and still expects ~35% revenue growth and 40-45% EPS growth through 2027.

ANET: JPM Says Fundamentals Remain Strong, but Investors Need More Confidence Around the Next Leg of Growth

JPM argues ANET’s medium-term thesis remains intact, but investor confidence has weakened as growth increasingly tracks industry averages rather than materially outperforming peers.

While JPM still expects ~35% revenue growth and 40-45% EPS growth through 2027, it argues management should do more to demonstrate how ANET can sustain above-industry growth as the 100G/400G switching cycle matures.

Evercore ISI argues the company’s Extensible Operating System (EOS) is an underappreciated competitive advantage and a key reason the company is positioned to benefit from AI networking growth.

The firm highlights EOS’s reliability, automation, observability, congestion management, and programmability, arguing these capabilities become increasingly valuable as AI clusters scale and network complexity rises.

EOS is viewed as a full-stack differentiator that enables the company to expand beyond traditional networking into AI fabrics, scale-up architectures, and eventually enterprise AI deployments.

JPM argues that networking is increasingly becoming the key bottleneck and performance gating factor for AI infrastructure, leading it to favor networking names over pure compute exposure.

The company received a bid, indicating positive market action in AI networking.

The stock saw a significant increase following CSCO's large AI order numbers.

Arista is well positioned for a durable AI networking cycle with strong deferred revenue growth.

The recent stock pullback was overdone, and purchase commitments show sustained hyperscaler demand.

The stock experienced mean reversion after several days of decline post-earnings.

We’ll wait until the weekend to dive further into the question when we go through the universe of charts, but on the margins some price action tea leaves less positive than the euphoric action earlier in the week, which is to be expected: not everything can...

BNP Paribas is bullish on scale-out networking, seeing AI cluster build driving upgrades.

The firm states that scale-out networking is becoming increasingly critical for AI infrastructure, with Arista well positioned to benefit from rising demand for high-performance back-end connectivity.

Next-gen architectures (endpoint-scheduled fabrics, multi-plane topologies) improve efficiency, reduce congestion, and support larger GPU clusters, driving network upgrades into CY26 and beyond.

Early ramps of Broadcom Tomahawk 6 and deployment momentum at key customers (e.g., MSFT, AMZN, GOOGL) reinforce a strong upgrade cycle, with potential doubling of 800G transceivers per cluster.

BNP Paribas expects sustained demand for advanced networking solutions as hyperscalers scale AI workloads.

Optical/networking checks remain strong into C1Q26 with demand outstripping supply and lead times extending, driven by AI capex and increasing mix toward higher-cost long-reach optics.

The company is expected to have +~33–34% revenue growth.

LITE/AAOI/COHR/FN/VIAV/ANET: Needham Sees Strong Optical Demand; Raises PTs, Positive Print Setup

Evercore added the company to its Tactical Outperform list due to accelerating AI networking demand and improving hyperscaler capex trends, expecting strong Q1 results and continued momentum from cloud/AI customers.

The company has a robust backlog, expanding scale-out/scale-up deployments, and incremental tailwinds from upcoming XPU/optical transitions, supporting sustained growth and margin strength.

Rosenblatt upgraded Arista due to increased confidence in its XPO strategy and better visibility into significant front-end wins with Google and Anthropic.

Management's revenue growth guidance of 25%/20% for 2026/2027 is considered conservative, with Arista potentially achieving ~40% growth in both years by maintaining high market share at Microsoft and Meta while gaining share at Google.

Enterprise and hyperscale orders are driving improvement in orders.

Piper Sandler's 4Q25 infrastructure survey indicates accelerating IT budgets and AI-led spend, with the company performing its best in three years.

ANET +1.8% as ORCL confirmed ANET as a customer.

Delivered solid Q2 numbers with strong gross margins and beat Street expectations on revenue, gross margin, and EPS.

Raised 2026 revenue guidance and campus targets, which was an unexpected positive surprise.

NVDA +1.9% JT MS Asia analyst outjust now saying Wistron seeing ~7% raise to their GBZOO rack orders TSM -1% likely on the SamsungITSLA foundry deal although we think that says more about TSM being supply constrained than any mfg advantage Sammy might have...