Arista Says Its AI Business Will Double to $7 Billion

Arista Networks (NYSE:ANET | ANET Price Prediction) closed at $169.91 on November 3, 2026, up 3.52%. At 7:59 p.m. ET, it traded at $185.10, up 8.94% after hours, for a company worth $214.29 billion at the close.

The move came after Arista reported third-quarter results and gave its first look at 2027. CEO Jayshree Ullal said she expects the AI fabrics business to double to approximately $7 billion. CFO Chantelle Breithaupt put the 2026 starting point at about $3.5 billion.

Ullal gave the target on the conference call. That makes it a management forecast, missing from the filed earnings release. She also guided 2027 revenue to approximately $18.5 billion, or growth of 38%-40%. Wall Street’s consensus on November 2 was about $16.75 billion.

The results came after the stock fell 18.07% through November 3, including an 8.34% drop on October 30, although it is still up 29.65% for the year.

What Arista Filed Versus What It Forecast

Revenue was $3,657.6 million, up 58.5%, beating the $3.33 billion estimate. Non-GAAP EPS of $1.20 beat the $1.08 consensus.

For the fourth quarter, Arista guided to revenue of $3.9 billion-$4.0 billion, a 48%-49% non-GAAP operating margin and EPS of $1.26-$1.30. It raised its 2026 guidance for the fourth time, to $13.3 billion, or 48% growth.

For 2027, Arista guided to a 62%-64% gross margin and an operating margin of about 49%. That means it expects AI growth without giving up profitability.

Where the 2027 Growth Comes From

Campus networking is expected to grow 60%, from about $1.25 billion to approximately $2 billion. Ullal called that pace “much faster than the market.”

Arista now has more than 100 Etherlink customers. Asked about customers that each make up 10%-plus of revenue, Ullal said, “So we’re feeling pretty good about at least three and maybe four.”

She also forecast greater than 10 GW of deployment by the end of 2027. She called that “our guess” and said some of it may be capacity that is already running.

A Slowdown Inside the Headline

Total growth slows from 48% to 38%-40%. Revenue outside AI and campus works out to an implied about $8.55 billion in 2026 and about $9.5 billion in 2027. That is implied growth of only about 11%.

Ullal said, “I would not read any conservatism into these numbers.” Even so, the outlook depends on two segments. Scale-up, which links accelerators inside a single rack, comes later: “The scale-up will still be in early trials, so I don’t think there’s a material number associated with scale-up in 27. I do think it could contribute in 28.”

Two Quarters of Visibility Behind a Full-Year Target

Purchase commitments rose to $11.4 billion from $9.7 billion, and inventory rose to $3.2 billion from $2.5 billion. Over the same period, deferred revenue (sales already billed but waiting on customer acceptance) slipped to about $6.8 billion from $6.9 billion. That suggests Arista is buying parts for demand it expects but has not yet booked.

Breithaupt said she is “confident in the supply chain” but added, “I think we have two quarters of visibility as we always have.”

What Investors Need to Watch in ANET Stock Before the Next Report

The stock trades at about 61 times earnings. A 2027 outlook well above consensus, an AI segment expected to double, and margin guidance near 49% are the main arguments supporters make for that multiple.

The bear case rests on slowing total growth, the fact that the rest of the business grows about 11% and scale-up won’t contribute until 2028.

Breithaupt gave you a test: she expects year-end deferred revenue to be higher than it was a year earlier. If the fourth-quarter report shows that, with revenue between $3.9 billion and $4.0 billion, the $7 billion target is on track. A close above the October 9 high of $216.74 would show the market agrees.

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