Why Arista Networks Is A Buy Despite Rising Competition

Arista Networks remains a buy as robust demand drives record Q2 revenues, up 37.7% YoY, and top-line outperformance vs. expectations. The company raised 2026 revenue growth guidance from 28% to 40% YoY, reflecting accelerating momentum. Despite a 220 bps dip in gross margin due to customer mix, operating margin expanded 110 bps YoY, highlighting effective expense discipline and operating leverage. Valuation is not cheap but justified by accelerating growth, sustained demand, and a favorable long-term outlook despite rising competition from Nvidia.