Arista Shares Fall 13.6% Despite Q1 Earnings Beat

Shares of Arista Networks Inc. plunged 13.6% on Wednesday, closing sharply lower after the networking company reported first-quarter fiscal 2026 results that surpassed analyst expectations, with revenue and adjusted earnings both beating forecasts.

The San Francisco-based firm posted revenue of $2.71 billion for the quarter ended March 31, a 35% increase from the year-earlier period. That figure exceeded the average Wall Street estimate of $2.62 billion. Non-GAAP adjusted earnings per share came in at $0.87, topping projections of $0.81. Net income rose to $1.02 billion, up from $813.8 million a year earlier. Executives attributed the strong performance largely to demand for AI-related networking products, including Ethernet switches and routers critical for data centers supporting large language models.

Despite the results, Arista's guidance for the current quarter tempered investor enthusiasm. The company projected second-quarter revenue of about $2.8 billion, slightly above the $2.78 billion consensus, and adjusted earnings per share of $0.88, ahead of estimates for $0.86. However, it flagged ongoing supply constraints in wafers and chips, which executives said would persist...