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Arista’s AI Engine Is Stronger but the Valuation Has Caught Up

Writer: Antonia Njeru
Antonia Njeru
9 hours ago
7 min read

Arista Networks  |  NYSE ANET  |  Earnings update through Q2 2026  |  Rating: Hold


Summary

  • I downgrade ANET from Strong Buy to Hold. 2Q fy 2026 revenue reached $3.036Bn, up 37.7% year over year and 7.3% above consensus, while non-GAAP EPS of $1.02 beat by $0.13. The business is executing above the previous thesis, but the current $199.39 price leaves little base-case return.


  • The original AI-networking thesis strengthened: management raised 2026 revenue expectations to about $12.6Bn and lifted the AI-fabrics goal to at least $3.5Bn.


  • My base case values the shares at $190 using $5.10 of 2027 non-GAAP EPS, a 42x terminal P/E, and a 10% discount rate.

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