Arista Networks vs Applied Materials
This page compares Arista Networks and Applied Materials, examining business models, financial performance, and market context in clear, accessible language. Both companies are presented neutrally to help readers understand strategies, strengths, and industry positions without urging action. Educational content, not financial advice.
This page compares Arista Networks and Applied Materials, examining business models, financial performance, and market context in clear, accessible language. Both companies are presented neutrally to ...
Why It's Moving
Shares jump after Arista lifts 2025 revenue guide and projects faster AI growth — management signals sustained momentum
- Earnings and guidance: Arista reported Q3 2025 results and on the conference call raised its full‑year 2025 revenue guidance to ~25%, up from its prior ~17% target, implying the business is accelerating versus earlier expectations and easing concerns about a slowdown.
- AI revenue ramp: Management now expects AI-related revenue to grow sharply — management moved the 2026 AI target materially higher (from about $1.5B this year toward a ~$2.75B+ run rate next year), signaling AI will become a much larger share of revenue and underlining higher‑margin, secular demand drivers for Arista’s switching and software portfolio.
- Longer-term outlook and product strength: Executives said Arista will exceed targets in both AI and Campus product lines and reiterated multiyear “mid‑teen” growth targets beyond 2026, indicating confidence in sustainable demand from hyperscalers and enterprise campus upgrades rather than a one‑time cyclical bump.
Applied Materials Hits New 1-Year High After Q4 Earnings Beat Fuels AI Optimism.
- Q4 EPS hit $2.17 versus $2.11 expected on $6.8B revenue topping $6.68B forecasts, underscoring robust demand for AI chipmaking tools.
- Analysts raised targets sharply—TD Cowen to $315, JPMorgan to $260—citing strong positioning in high-growth AI inflections despite China curbs.
- New AI-focused products like cold-field emission metrology boost resolution 50% and speed 10x, signaling edge in next-gen semiconductor tech.
Shares jump after Arista lifts 2025 revenue guide and projects faster AI growth — management signals sustained momentum
- Earnings and guidance: Arista reported Q3 2025 results and on the conference call raised its full‑year 2025 revenue guidance to ~25%, up from its prior ~17% target, implying the business is accelerating versus earlier expectations and easing concerns about a slowdown.
- AI revenue ramp: Management now expects AI-related revenue to grow sharply — management moved the 2026 AI target materially higher (from about $1.5B this year toward a ~$2.75B+ run rate next year), signaling AI will become a much larger share of revenue and underlining higher‑margin, secular demand drivers for Arista’s switching and software portfolio.
- Longer-term outlook and product strength: Executives said Arista will exceed targets in both AI and Campus product lines and reiterated multiyear “mid‑teen” growth targets beyond 2026, indicating confidence in sustainable demand from hyperscalers and enterprise campus upgrades rather than a one‑time cyclical bump.
Applied Materials Hits New 1-Year High After Q4 Earnings Beat Fuels AI Optimism.
- Q4 EPS hit $2.17 versus $2.11 expected on $6.8B revenue topping $6.68B forecasts, underscoring robust demand for AI chipmaking tools.
- Analysts raised targets sharply—TD Cowen to $315, JPMorgan to $260—citing strong positioning in high-growth AI inflections despite China curbs.
- New AI-focused products like cold-field emission metrology boost resolution 50% and speed 10x, signaling edge in next-gen semiconductor tech.
Which Baskets Do They Appear In?
AI Infrastructure Investment Overview | Dell Results
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Published: August 31, 2025
Explore BasketMeta's AI Engine
This carefully selected group of stocks represents the companies building the backbone of AI's future. Our professional analysts have identified the key suppliers providing everything from advanced chips to power infrastructure that Meta needs for its massive AI data center expansion.
Published: July 15, 2025
Explore BasketOracle's Cloud Boom
Oracle's major cloud contracts triggered a stock upgrade, highlighting a massive expansion in AI data centers. These companies provide the essential hardware, chips, networking, and real estate needed to power this growth. Each was selected for its direct exposure to this multi-billion dollar infrastructure boom.
Published: July 1, 2025
Explore BasketWhich Baskets Do They Appear In?
AI Infrastructure Investment Overview | Dell Results
Dell's recent earnings revealed a massive surge in demand for its AI servers, beating expectations. This highlights a significant investment opportunity in the companies that supply the essential hardware and components powering the AI infrastructure boom.
Published: August 31, 2025
Explore BasketMeta's AI Engine
This carefully selected group of stocks represents the companies building the backbone of AI's future. Our professional analysts have identified the key suppliers providing everything from advanced chips to power infrastructure that Meta needs for its massive AI data center expansion.
Published: July 15, 2025
Explore BasketOracle's Cloud Boom
Oracle's major cloud contracts triggered a stock upgrade, highlighting a massive expansion in AI data centers. These companies provide the essential hardware, chips, networking, and real estate needed to power this growth. Each was selected for its direct exposure to this multi-billion dollar infrastructure boom.
Published: July 1, 2025
Explore BasketRace to Four Trillion
Invest in the companies building the foundation of the AI revolution. These carefully selected stocks represent crucial suppliers and enablers benefiting from Nvidia and Microsoft's historic race to $4 trillion valuations and their unprecedented spending on AI infrastructure.
Published: June 30, 2025
Explore BasketGoogle's Growth Engine
As Google pours billions into AI and cloud infrastructure, a select group of technology suppliers are reaping the rewards. These carefully chosen stocks represent the companies providing the essential hardware and technology that power Alphabet's ambitious growth plans.
Published: June 30, 2025
Explore BasketThe $4 Trillion Tech Race
Behind Nvidia and Microsoft's historic race to a $4 trillion valuation lies an entire ecosystem of essential suppliers. These carefully selected companies provide the critical infrastructure, semiconductors, and hardware that make the AI revolution possible.
Published: June 30, 2025
Explore BasketInvestment Analysis
Arista Networks
ANET
Pros
- Arista Networks recorded a 28% year-over-year sales increase to $2.31 billion in Q3 2025, beating management guidance.
- The company enjoys strong profitability with a current return on equity (ROE) of 32.3%, above its 10-year average.
- Arista’s shares have shown solid performance, rising 26.7% over the past year and outperforming the broader market.
Considerations
- Analyst price targets indicate only a moderate upside potential of approximately 6% over the next 12 months.
- Despite strong ROE, Arista’s profitability metrics are lower compared to some peers in semiconductor equipment and software sectors.
- Recent analyst activity shows mixed sentiment with some downgrades amid ongoing competitive pressures in cloud networking.
Pros
- Applied Materials exhibits strong technical momentum with its share price above key moving averages, indicating bullish trends.
- The company has a robust return on equity at 35.91%, higher than Arista Networks, reflecting efficient capital use.
- AMAT benefits from diversified exposure in semiconductor equipment, supporting growth from multiple end markets including chip manufacturing.
Considerations
- Applied Materials faces some near-term selling pressure, raising risks of bearish movement despite current bullish technicals.
- Its valuation metrics are somewhat less attractive in comparison to Arista Networks within their respective industries.
- The semi equipment industry is cyclical and exposed to fluctuations in chip demand, impacting Applied’s revenue visibility.
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