What Could Send Arista Networks Stock Higher

Arista Networks (ANET) stock trades at 65.7 times earnings, compared with 21.5 for the S&P 500. Investors typically tolerate that kind of premium only for a company with substantial growth still ahead. Executives have raised the sales outlook for 2026 three times, pointing to artificial intelligence customers to explain the trajectory. So what are those customers buying from Arista?

Arista's AI Customers Are Buying Network Switches

The short answer is Etherlink switches. These make up the networking gear Arista sells for artificial intelligence systems. The company refers to these networks as AI fabrics. On the August 4, 2026 call, executives noted that more than 100 customers have bought the equipment so far.

The company has set an overall AI goal: at least $3.6 billion of AI sales in 2026. While that figure remains a target rather than a final result, recent performance lends it credibility. Revenue grew 37.7% from a year earlier in fiscal Q2 2026. Executives noted that both AI and enterprise customers drove significant growth.

How Big Is AI Networking Against All Of Arista?

If executives meet both of their stated goals, AI networking would represent about 29% of Arista's 2026 sales, or more if AI sales beat the target. The AI target is at least $3.6 billion, while the outlook for the entire company is about $12.6 billion. This means most of Arista's sales still come from elsewhere.

The AI business could expand well beyond the 2026 target. Executives expect a use case for their gear known as Scale-Across to account for about 30% of the 2026 AI target. By 2030, the total market for Scale-Across is forecast at $15 billion to $20 billion. That projection reflects the market for every supplier, not just Arista's expected share. Still, the broader industry total is several times the size of the company's entire 2026 AI target.

Market performance reflects these expectations. Arista stock returned 45% over the past twelve months, against 17.0% for the S&P 500. The shares now sit 2.3% below their 52-week high. The current price appears to assume that AI sales will keep growing well past the 2026 target.

Why Did Arista Leave Its AI Goal Unchanged?

The question of future guidance came up on the August 4 call after Arista raised its 2026 outlook by $1.1 billion but left the AI target exactly where it was. Executives explained that they want the flexibility to ship whatever equipment they can. The company expects the extra revenue to come from all its product lines, and management chose not to hold itself to a new number for AI.

Component availability is the limit management named. Executives noted that the broader industry faces a supply problem that they do not expect to end until 2028. Arista has also promised its suppliers more. The company's multiyear purchase commitments reached about $9.7 billion, almost triple the level of a year earlier.

Investors will get their next look at the business when Arista reports third-quarter 2026 results on Tuesday, November 3, 2026. If the company sets a goal for AI sales above $3.6 billion on that call, it would suggest Arista is getting enough parts to ship more AI gear in 2026.

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