Zacks Investment Ideas feature highlights: Arista Networks, Microsoft and Alphabet

Globe and Mail

4 days ago

For Immediate Release
Chicago, IL – July 31, 2025– Today, Zacks Investment Ideas feature highlights Arista Networks ANET, Microsoft MSFT and Alphabet GOOGL.
Will Arista Networks Keep Soaring as Q2 Earnings Approach?
Arista Networks has joined a wave of tech stocks that are receiving upgrades from analysts thanks to its AI-driven data center innovation and robust revenue growth.
Considering such, there is much enthusiasm building ahead of Arista Networks' Q2 report next Tuesday, August 5.
To that point, Arista Networks' stock has rebounded more than +30% in the last three months and is now less than 10% from its all-time peak of $133 a share (stock-split adjusted basis), which it hit in January.
Arista Networks Q2 Expectations
As a brief preview, Arista Networks' Q2 sales are thought to have spiked 25% to $2.11 billion from $1.69 billion a year ago. Even better, Q2 earnings are also expected to be up 25% to $0.65 per share compared to EPS of $0.52 in the prior period.
Adding to the enthusiasm for Arista Networks' Q2 report is that the cloud networking solutions leader has topped sales estimates for 22 consecutive quarters and has reached or exceeded the Zacks EPS Consensus in every quarter since 2014. Over the last four quarters, Arista Networks has posted an average sales and earnings surprise of 2.61% and 11.82% respectively.
Arista Networks' Robust Revenue Growth
Piggybacking on analysts upgrading Arista Networks' stock due to its robust revenue growth, the company's top line is now expected to expand 19% this year and is projected to stretch another 17% in fiscal 2026 to $9.76 billion.
Since the pandemic, Arista Networks' top line has expanded more than 200% with 2020 sales at $2.31 billion. The remarkable post-pandemic surge has been fueled by major cloud players like Microsoft and Alphabet, which rely heavily on Arista Networks' tailor-made AI data center networking platforms.
EPS Outlook & Revisions
Taking advantage of its sales growth, Arista Networks' bottom line is currently slated to expand 13% in FY25 with FY26 earnings forecasted to pop another 15% to $2.97 per share.
Reassuringly, FY25 and FY26 EPS estimates have continued to trend higher over the last 90 days, moving slightly higher in the last month.
Bottom Line
Attributed to the trend of positive earnings estimate revisions, Arista Networks' stock lands a Zacks Rank #1 (Strong Buy) and could certainly be in store for more upside as its Q2 results approach next week.
As a reminder that Arista Networks' stock previously traded over $400 a share prior to its 4-1 stock split last year, now appears to be an ideal time to buy ANET before it gets more expensive.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Microsoft Corporation (MSFT): Free Stock Analysis Report
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Arista Networks, Inc. (ANET): Free Stock Analysis Report