Arista Networks Delivers Strong Q4 Results, But Stock Drops on Meta Revenue Decline

Arista Networks (NYSE:ANET) posted better-than-expected fourth-quarter earnings and revenue, while issuing an upbeat forecast for the current quarter, as the AI-driven surge in data center expansion continues to fuel demand for its networking equipment.

The company, which counts tech heavyweights Meta Platforms and Microsoft as key clients, has been leveraging the AI boom to drive sales of its Ethernet switches and routers, critical components for next-generation data centers.

For Q4, Arista reported adjusted earnings per share of $0.65 on revenue of $1.93 billion, surpassing analyst estimates of $0.57 per share and $1.90 billion in revenue. The company noted that it outperformed expectations across all key financial metrics.

Looking ahead, Arista projects Q1 revenue between $1.93 billion and $1.97 billion, ahead of Wall Street’s forecast of $1.91 billion, signaling continued strong customer demand.

Despite the positive outlook, some uncertainties loom over near-term growth. Analysts have pointed to potential delays in a Microsoft-related project and unclear timelines for Nvidia’s new AI-optimized Blackwell chips, which could affect Arista’s deployment cycles.

Market volatility in AI-driven tech stocks has also pressured Arista’s share price in 2025, especially after the emergence of a low-cost, open-source AI model from Chinese startup DeepSeek raised concerns about whether mega-cap tech firms will sustain their massive AI spending levels.

Adding to investor jitters, Morgan Stanley analysts highlighted a 17% year-over-year decline in revenue from Meta, calling it a key trend to watch. While they acknowledged the near-term weakness, they maintained a bullish stance on Arista’s long-term outlook, viewing pullbacks as a buying opportunity. As a result, the company’s shares fell more than 6% intra-day today.