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Arista Networks’ $12.6 Billion AI Boom: Can 40% Growth Keep Running?

Arista Networks reported strong fiscal second quarter 2026 results, highlighted by record revenues exceeding $3 billion—a milestone not previously achieved by the company in a single quarter. This represents a 37.7% increase year-over-year and surpasses the company’s guidance of $2.8 billion. Growth was primarily driven by demand from AI-focused and enterprise customers, with international sales growing to 23% of total revenue from 15.5% the prior quarter, reflecting robust global expansion. The company’s gross margin for the quarter stood at 63.4%, a decline from 65.6% the previous year but an improvement over the prior quarter’s 62.4%. The margin contraction was attributed to product mix and supply chain cost pressures such as increased memory and silicon costs. Operating expenses rose modestly to $411 million, or 13.5% of revenue, reflecting incremental investments in liquid cooling, high radix switching, and AI optimization software.