Arista Networks (ANET)

AI/data-center networking switches (Arista) — high-speed Ethernet for GPU clusters

AI exposure 62% — derived from reported segment revenue, not asserted.

Where it sits

Connectivity → Network Switching & Hardware · figures rebased to Q2 2026, reported 2026-08-04

AI/data-center Ethernet switches & routers (7800 AI spine, R4 series, Jericho/Tomahawk-based) is 84% of revenue, so Network Switching & Hardware is effectively the whole company rather than one leg of it. The rest is tagged separately: Data & Infrastructure Software at 16%.

Also tagged: emerging in Software Stack → Data & Infrastructure Software.

Reported segments

• Product — 86% of revenue
• Service — 14% of revenue

Arista ($3.036B Q2 2026, +37.7% YoY — a record $3B quarter). Product 86.0% ($2.61B) = primary B3 Network Switching & Hardware — data-centre and campus Ethernet including the AI back-end fabric; Service 14.0% ($430.5M) = B5 Data & Infrastructure Software on CloudVision and support.

How the 62% is built

• Product — 86% of revenue × 65% AI-driven (disclosed). AI back-end and front-end fabric is the growth driver, on a base that also serves conventional data-centre and campus networking
• Service — 14% of revenue × 40% AI-driven (disclosed). Support and CloudVision attach to the same installed base, weighted to the AI deployments driving new sales

Investment read

Moat. EOS software consistency plus CloudVision operations plus a decade of hyperscaler design wins in high-speed data-center Ethernet — real switching costs at the network-operations layer. The limit is who the customers are: Microsoft 26% and Meta 16% of FY2025 revenue, Cloud & AI Titans ~48%, each running its own white-box program. The 100+ cumulative AI customers are broadening this, but from a very concentrated base.

Bottleneck / pricing power. Pricing power is strong against enterprises and weak against the anchors: Q2 2026 gross margin 63.4%, down 220bps YoY as Arista absorbed component costs on hyperscaler mix rather than repricing. The binding constraint is supply, not demand — $9.7B of multi-year purchase commitments against a shortage management says may run through 2028.

Role in the AI stack. The AI back-end networking layer — connects GPU clusters.

Connected companies

• Broadcom (AVGO) — ANET is supplied by: Tomahawk/Jericho switch silicon
• Marvell Technology (MRVL) — ANET is supplied by: networking/optical DSP silicon (Arista is primarily Broadcom-based)
• Microsoft (MSFT) — ANET supplies: largest customer: Azure datacenter switching (~20-26% of Arista revenue per 10-K)
• Keysight Technologies (KEYS) — ANET is supplied by: 400/800G Ethernet validation for datacenter switching
• Cisco Systems (CSCO) — ANET competes with: Data-center switching — ANET ~28% high-speed share, CSCO broader enterprise; head-to-head 100-800G
• Ciena (CIEN) — ANET competes with: network systems (DC vs optical transport)
• Nokia (NOK) — ANET competes with: partial overlap — Nokia DC switching fabric vs Arista, but Arista dominates AI/data-center Ethernet
• Hewlett Packard Enterprise (HPE) — ANET competes with: AI-native data-center switching — Juniper vs Arista
• Ubiquiti (UI) — ANET competes with: networking hardware overlap (different tiers — UI SMB vs ANET hyperscale)
• NVIDIA (NVDA) — ANET competes with: AI data-center networking — NVIDIA (Spectrum-X/InfiniBand) vs Arista
• Monolithic Power Systems (MPWR) — ANET is supplied by: power management for network switches (MPS data-center switch power)
• Meta Platforms (META) — ANET supplies: AI networking switches for Meta
• Lumentum Holdings (LITE) — ANET is supplied by: optical transceivers/components for Arista switches (Arista partners coherent-optics vendors)
• Coherent (COHR) — ANET is supplied by: optical transceivers for Arista (coherent-optics partner)

Others in Network Switching & Hardware

• Cisco Systems (CSCO)
• Ciena (CIEN)
• Ubiquiti (UI)
• Astera Labs (ALAB)

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