Arista Networks (NYSE:ANET) reported stronger-than-expected first-quarter results driven by robust demand for artificial intelligence networking infrastructure, although the company’s shares fell about 9% in premarket trading on Wednesday after investors reacted to a smaller-than-expected increase in full-year guidance.
The networking equipment maker posted first-quarter 2026 revenue of $2.71 billion, ahead of analyst expectations of $2.61 billion and representing year-over-year growth of 35%.
Billings growth accelerates as AI demand remains strong
Arista said billings growth accelerated to 54% year over year during the quarter, compared with 43% growth in the previous quarter, reflecting continued momentum in AI-related infrastructure spending.
“Arista is off to a strong start in Q1 2026, with both our results and our industry-leading net promoter score,” said Jayshree Ullal, chairperson and chief executive officer of the company.
“We are uniquely positioned to deliver the mission-critical confluence of secure client-to-campus-to-cloud and AI networking.”
Company expands AI networking product portfolio
During the quarter, Arista introduced its universal AI spine architecture powered by the 7800 platform, designed to support large-scale AI networking deployments with high-speed connectivity and predictable performance.
The company said technologies such as Virtual Output Queuing (VOQ) help eliminate head-of-line blocking, while larger buffers are designed to absorb AI-related traffic spikes and reduce congestion issues.
Second-quarter guidance slightly ahead of forecasts
Arista projected second-quarter revenue of approximately $2.8 billion, modestly above analyst consensus estimates of $2.78 billion.
The company also forecast adjusted earnings per share of $0.88 for the second quarter, compared with Wall Street expectations of $0.86.
Investors disappointed by limited increase to annual guidance
Arista raised its full-year 2026 revenue growth forecast to 27.7% from 25%.
However, the updated target still came in below analyst expectations. According to Morgan Stanley analyst Meta Marshall, Wall Street projections had ranged between 28% and 30%, contributing to the decline in the company’s share price.
Despite the market reaction, Marshall said she continues “to see ANET as one of the cleanest ways to own the AI networking cycle, with the quarter reinforcing that the debate is less about demand and more about how much supply the company can secure.”
“We see supply chain challenges as universal, but see ANET as having proven in the past more able to handle these challenges than competitors,” she added, while maintaining an Overweight rating on the stock.
Several other Wall Street firms also kept bullish recommendations on Arista shares, maintaining Buy or Strong Buy ratings and, in some cases, raising their price targets.