Arista Networks vs AT&T
This page compares Arista Networks and AT&T, examining their business models, financial performance, and the market context in which each operates. It presents neutral, accessible information on how a networking products company differs from a diversified telecommunications provider. Educational content, not financial advice.
This page compares Arista Networks and AT&T, examining their business models, financial performance, and the market context in which each operates. It presents neutral, accessible information on how a...
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.
AT&T shares dip harder than the market amid telecom sector pressures.
- Stock closed at $24.84 after -1.74% decline, outpacing the market's fall and reflecting telecom-specific headwinds.
- Zacks Consensus sees 2025 earnings at $2.06 per share, down 8.85% year-over-year, raising flags on margin compression.
- Revenue outlook holds at $124.96 billion, up 2.14%, but recent price action from $25.95 on Dec 1 to $24.56 shows building selling pressure.
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.
AT&T shares dip harder than the market amid telecom sector pressures.
- Stock closed at $24.84 after -1.74% decline, outpacing the market's fall and reflecting telecom-specific headwinds.
- Zacks Consensus sees 2025 earnings at $2.06 per share, down 8.85% year-over-year, raising flags on margin compression.
- Revenue outlook holds at $124.96 billion, up 2.14%, but recent price action from $25.95 on Dec 1 to $24.56 shows building selling pressure.
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Explore BasketWhich Baskets Do They Appear In?
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Explore BasketInvestment Analysis
Arista Networks
ANET
Pros
- Arista Networks has demonstrated strong revenue growth of 19.5% in 2024, reaching $7 billion with earnings growth of 36.6%, indicating improving profitability.
- The company is well positioned in the growing AI and cloud networking markets, targeting significant AI infrastructure revenue estimated at $750 million for 2025.
- Arista has a robust gross profit margin of 64%, reflecting efficient operations and strong pricing power within its technology sector niche.
Considerations
- Arista Networks' valuation is high, with a price-to-earnings ratio above 50, significantly above the technology sector average, implying premium market expectations.
- The stock price has experienced considerable volatility, ranging from about $59 to $165 in the past year, indicating higher investment risk.
- Dependency on large cloud customers remains a risk, although Arista is reducing reliance on some major clients like Meta, its business concentration could be a vulnerability.
AT&T
T
Pros
- AT&T has a large and diversified telecommunications business, providing stable cash flow streams from wireless, broadband, and media services.
- Recent strategic moves include focus on 5G network expansion and improving operational efficiency to enhance long-term growth potential.
- The company benefits from a solid balance sheet and liquidity supporting dividend payments and ongoing network investments.
Considerations
- AT&T’s growth is constrained by mature market conditions and competition, limiting significant revenue expansion opportunities.
- The company carries substantial debt from previous acquisitions and capital expenditures, weighing on financial flexibility and credit metrics.
- Exposure to regulatory and competitive pressures in telecommunications and media segments pose ongoing operational and strategic risks.
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