Both Arista and Cisco just posted record AI-driven results, yet their stocks sold off hard. One company offers margin-rich focus while the other controls its own silicon, and the scale-across design wins separating them could define data center networking for the next decade.
Both Arista and Cisco just posted record AI-driven results, yet their stocks sold off hard.
One company offers margin-rich focus while the other controls its own silicon, and the scale-across design wins separating them could define data center networking for the next decade.
Both Arista and Cisco just posted record AI-driven results, yet their stocks sold off hard. One company offers margin-rich focus while the other controls its own silicon, and the scale-across design wins separating them could define data center networking for…
Arista Networks (NYSE:ANET | ANET Price Prediction) and Cisco Systems (NASDAQ:CSCO) both reported in August, and both said AI networking powered record results. Arista posted its first $3B quarter on Ethernet AI fabrics. Cisco closed a record year on hyperscaler orders and a campus upgrade. Both now compete for the same scale-across traffic between data centers.
AI Fabrics Lift Arista While a Supercycle Lifts All of Cisco
Arista’s revenue reached $3.04B, up 37.7% YoY and ahead of the $2.83B estimate. Arista’s focused product line benefited from strong AI demand. CEO Jayshree Ullal said EtherLink adoption “now exceeds 100 cumulative customers from the initial four to five customers I spoke of in 2024.” Management also raised its 2026 outlook to about $12.6 billion, which works out to 40% growth.
Cisco’s demand spreads much wider. Networking revenue rose 28% to $9.791B, and product orders climbed 35%, or 25% ex-hyperscalers. Growth that strong outside the cloud giants points to a real enterprise upgrade. Hyperscaler AI orders hit $4 billion in the quarter. CEO Chuck Robbins said: “We are not accidental recipients of what’s going on in this AI transition.”
Arista Sells Focused Switches, Cisco Sells the Whole Stack
Arista competes on EOS software. Ullal said that buyers working against tight AI deployment timelines prefer integrated systems over white-box switches. Its 1.6 Tbps 7060XE7 needs liquid cooling, so trials run through the back half of 2026, with production expected in 2027. Concentration still concerns me: Ullal expects “one, maybe two, 10% customers” next to Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META).
Cisco controls more of its own supply chain. It buys Silicon One chips directly from Taiwan Semiconductor Manufacturing (NYSE:TSM) and has secured three Scale Across design wins for the P200. That control weighs on margins. Non-GAAP gross margin slipped to 66.3% from 68.4% as hardware took a bigger share of the mix. Price increases also added about five points to revenue growth, which masks the volume picture.
Averytin News Financial update.