New York, Feb 13, 2026, 05:12 EST — Early signs from premarket.
- ANET slid 3.8% ahead of the bell, giving back some ground after its surge following earnings.
- Arista came in ahead of quarterly expectations and projected first-quarter revenue that beats Wall Street forecasts.
- Traders are keeping an eye on whether rising memory costs will squeeze margins.
Arista Networks shares dropped 3.8% to $135.12 in U.S. premarket action Friday, erasing gains from a post-earnings rally the night before.
The early drop is notable—Arista’s now seen as a gauge for the AI data center wave. Demand is holding up, but component costs aren’t letting up. Hardware stocks that even hint at margin pressure get sold off fast, and when a company’s narrative seems flawless, traders don’t hesitate to lock in gains.
Arista dropped its numbers into a market bracing for rising memory costs and the hit those could deliver to gross margin — that slice of sales left when production expenses are stripped away.
Late Thursday, the company posted fourth-quarter revenue of $2.488 billion, with non-GAAP net income hitting $1.047 billion, or $0.82 per share. These non-GAAP results strip out things like stock-based comp and intangible amortization.
Arista is projecting first-quarter revenue in the neighborhood of $2.6 billion, targeting a non-GAAP gross margin between 62% and 63%, and looking for a non-GAAP operating margin near 46%.
CEO Jayshree Ullal noted the company has now shipped 150 million ports in total and reported $9 billion in revenue for the full year. On the numbers, CFO Chantelle Breithaupt highlighted that Arista hit over $1 billion in net income for a single quarter for the first time.
During the earnings call, executives bumped up their full-year 2026 forecast, now seeing 25% revenue growth. The target for AI networking revenue? That moves higher too, to $3.25 billion, per the transcript of management’s comments.
Even so, that call came with a red flag that caught traders’ attention: component costs are spiking. Ullal didn’t sugarcoat it—she said memory prices had “worsened significantly” and described them as “horrendous,” while Arista works to lock in supply for 2026. The Motley Fool
The earnings release showed up as an exhibit in Thursday’s Form 8-K filing.
It’s been a shaky week for networking stocks. Cisco stumbled hard on Thursday, dragging tech names like Arista down with it as traders grappled with the possibility that memory inflation could stick around for several more quarters.
Amit Daryanani at Evercore ISI bumped up his price target for Arista to $200, sticking with the stock as his top pick, according to MarketWatch. Some analysts appeared to favor Arista’s guidance.
Things could get tricky, though. Should memory and silicon prices continue to rise, or if supply gets even more constrained, Arista faces a dilemma: guard its margins, or chase volume. Either way, the company’s numbers might get bumpy — especially if major clients start shifting their deployment schedules.
Traders are set to see if ANET can stick to its post-earnings gains when the bell rings. All eyes move to Nvidia’s numbers next, with its earnings on Feb. 25 marking the upcoming pulse check for AI infrastructure sentiment.
