Arista forecasts upbeat third-quarter revenue on strong demand for networking equipment

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(Reuters) -Arista Networks on Tuesday forecast third-quarter revenue above Wall Street expectations, signaling resilient demand for its networking equipment amid growing footprint of data centers.

Shares of the Santa Clara, California-based company rose about 13% in extended trading.

Demand for the company’s ethernet switches and routers, which are widely deployed in data centers, has surged as enterprises accelerate AI-related spending.

Arista has projected third-quarter revenue of about $2.25 billion, compared with analysts’ estimates of $2.11 billion, according to data compiled by LSEG.

Moreover, U.S.-based firms such as Arista are widely expected to benefit the country’s tariff policies, as it may help them win new contracts from hyperscale clients and boost market share.

Arista’s customer base includes leading cloud service providers, with Microsoft and Meta Platforms accounting for about 20% and 15% of total revenue, respectively, in 2024.

For the second quarter, Arista’s revenue reached $2.21 billion, compared to analysts’ estimates of $2.11 billion.

On an adjusted basis, the company earned 73 cents per share in the second quarter, beating analysts’ estimates of 65 cents per share.

(Reporting by Kritika Lamba in Bengaluru; Editing by Leroy Leo)