Arista: the AI network that is not NVIDIA's, and paid for in cash

Most AI clusters that do not run on NVIDIA's own network run on Ethernet, and Arista sells the switches many of the largest buyers use. In the quarter to September 2026 revenue was $3.66B, up 58.5%, ahead of its own $3.3B guide, at a 49% operating margin before stock pay, and it guided the December quarter to $3.9–4.0B. It has about $14.4B of cash and securities and no debt; deferred revenue of $6.8B and $11.4B of non-cancellable purchase commitments say demand is booked ahead. Its Etherlink SU-144 switch, built with AMD, Arm, Broadcom, Meta, Microsoft and others under the open scale-up Ethernet effort, aims at the links inside the rack that NVIDIA's NVLink holds today. Conviction is MEDIUM. Two customers were 26% and 16% of 2025 revenue, reported to be Microsoft and Meta, both bullish MenFem calls whose capex is Arista's demand. Gross margin is drifting down on big-customer discounts; inventory rose 43% this year, and the purchase commitments would turn a pause in demand into an inventory problem; and management has said scale-up revenue will not be material until 2028. NVIDIA's Spectrum-X, Cisco, and white-box switches built by contract makers such as Celestica compete. The shares closed at $159.16 on 5 November in the networking selloff and rose 7% the next day. BULLISH, conviction MEDIUM, three years. This view was formed by MenFem's research process at Connor's request and adopted by him. The entry is the 6 November 2026 closing price; the market was closed when the call was published on 7 November.