Arista Networks, Inc.

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Arista Networks, Inc. stock analysis ANET overview
Bullish +75

The Zacks Analyst Blog Cisco, Arista Networks, Dell and Hewlett

📅 Zacks Equity Research released a blog post on May 12, 2026, featuring analysis on Cisco Systems (CSCO), Arista Networks (ANET), Dell Technologies (DELL), and Hewlett Packard Enterprise (HPE).

📈 Cisco is scheduled to release its third-quarter fiscal 2026 results on May 13 with anticipated revenues between $15.4 billion and $15.6 billion.

💰 Analysts expect non-GAAP earnings for Cisco in Q3 FY2026 to range between $1.02 and $1.04 per share, representing year-over-year growth of approximately 8.3%.

📊 Cisco has exceeded Zacks Consensus Estimates in all trailing four quarters, with an average beat rate of 2.89%.

🚀 Strong demand for AI infrastructure is expected to drive Cisco's top-line growth, fueled by networking product orders that grew 20% in the second quarter of fiscal 2026.

🤖 Cisco anticipates more than $3 billion in AI infrastructure revenues from hyperscalers during fiscal 2026 and plans to deploy Silicon One architecture by 2029.

⚠️ The company faces stiff competition in AI networking and enterprise security from Arista Networks, Dell Technologies, and Hewlett Packard Enterprise, including HPE's strengthened position via the Juniper acquisition.

📉 Cisco shares have appreciated 25.4% year-to-date, outperforming the Zacks Computer & Technology sector return of 16.8% but underperforming rivals Dell (+106.9%) and Arista (+8.2%).

🔍 Valuation metrics show Cisco trading at a forward price/sales ratio of 5.98X, which is higher than peers Dell (1.18X) and HPE (1X) but lower than Arista Networks (14.43X).

📊 High-performance networking orders for Cisco total more than $2.5 billion in the pipeline, including sovereign, Neocloud, and enterprise segments.

🤝 A joint venture between Cisco, AMD, and HUMAIN aims to deliver up to 1 gigawatt of AI infrastructure by 2030.

🛡️ Sovereign solutions are gaining traction for Cisco as rapid AI adoption drives concerns regarding privacy, data governance, and regulatory compliance.

📊 Analysts recommend accumulating Cisco stock ahead of earnings due to a strong portfolio and accelerating AI push, warranting a premium valuation.

🏆 Zacks currently assigns Cisco a Rank #2 (Buy) recommendation based on its financial outlook and strategic positioning.

Bullish Signals
  • Arista Networks (ANET) is highlighted for its versatile unified software stack across WAN routing, campus, and data center infrastructure, which differentiates it from competitors like Cisco.
  • Shares of Arista Networks appreciated 8.2% year-to-date, demonstrating investor confidence despite market volatility in the sector.
  • Arista's positioning as a top contender in AI networking and enterprise security domains suggests strong future growth potential alongside major rivals like Dell and HPE.
  • The broader technology landscape shows that high-performance networking products have a robust pipeline with over $2.5 billion in orders across sovereign, Neocloud, and enterprise customers.
  • Arista benefits from the expanding demand for AI infrastructure, where it competes directly with Cisco, Dell, and HPE, capturing significant market share in the AI networking sector.
Risk Factors
  • Cisco faces stiff competition from Arista Networks, Dell Technologies, and Hewlett Packard Enterprise specifically in the lucrative AI networking and enterprise security domains.
  • The market perceives a stretched valuation for Cisco at this moment, with a forward price/sales ratio of 5.98X that exceeds both the industry average (5.73X) and peers Dell (1.18X) and HPE (1X).
  • While Arista Networks trades at an even higher multiple of 14.43X, the intense rivalry with competitors like HPE, who recently elevated their stance via the Juniper Networks acquisition, poses a threat to Cisco's market share.
  • Cisco shares have underperformed major peers YTD, trailing Dell Technologies' 106.9% gain and HP Enterprise's 30.6% appreciation despite gaining only 25.4% year-to-date.
Full Analysis
The article highlights that Cisco Systems (CSCO) is set to report third-quarter fiscal 2026 earnings on May 13, with analysts projecting revenues between $15.4 billion and $15.6 billion, representing a 10.1% growth year-over-year based on the company's previous quarter. Non-GAAP earnings are expected between $1.02 and $1.04 per share, slightly below the Zacks consensus estimate of $1.04, which implies roughly 8.3% year-over-year growth. Cisco has surpassed analyst expectations in all four trailing quarters, with an average beat rate of 2.89%, driven primarily by robust demand for AI infrastructure and campus networking solutions. Key growth drivers include a 20% increase in networking product orders in the second quarter of fiscal 2026, powered by the Silicon One architecture and new high-performance chips like the G300, alongside a growing pipeline exceeding $2.5 billion in orders for AI networking products from sovereign, neocloud, and enterprise customers. The company anticipates over $3 billion in AI infrastructure revenues from hyperscalers during fiscal 2026 and plans to deploy its Silicon One architecture across high-performance systems by 2029, supported by a joint venture with AMD and HUMAIN to deliver up to 1 gigawatt of AI infrastructure by 2030. Despite these strengths, Cisco faces stiff competition in the AI networking and enterprise security domains from Arista Networks (ANET), Dell Technologies (DELL), and Hewlett Packard Enterprise (HPE). While HPE recently strengthened its position through a Juniper acquisition and Arista is noted for its versatile unified software stack, Cisco currently trades at a forward price/sales ratio of 5.98X, which the article suggests may indicate a stretched valuation relative to peers like Dell (1.18X) and HPE (1X), though still below the high multiple of Arista at 14.43X. Cisco shares have appreciated 25.4% year-to-date, underperforming significantly compared to Dell (106.9%) and Arista (8.2%), which suggests investors may view its current valuation as less attractive despite its strong portfolio and AI positioning. The Zacks Analyst Blog maintains a Buy rating for Cisco with a Zacks Rank of 2, recommending that investors begin accumulating the stock ahead of its upcoming earnings release due to the expanding portfolio and accelerating AI push justifying a premium valuation. The analysis concludes that while competition is intensifying, Cisco's expanding offerings in high-speed networking and AI infrastructure support its near-term results, reinforcing the recommendation to hold or buy despite the current valuation stretch.