Arista NetworksANET
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Arista earned a Zacks Rank #1 Strong Buy after a beat-and-raise quarter with surging Q3/FY26/FY27 EPS estimates and a 30% upside price target.
Impact on assets 3
Artificial Intelligence
Theme Impact 3
Off-coverage companies
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United States▲2impact 4
Arista Networks Lifts 2026 Revenue Guidance to US$12.60 Billion on AI Demand
Arista Networks raised its 2026 revenue guidance to US$12.60 billion, including at least US$3.50 billion from AI-related business, after reporting second-quarter fiscal 2026 revenue of US$3.00 billion, a 37.7% year-over-year increase. The higher outlook underscores how AI-driven cloud networking has become a central revenue pillar for the company, shaping its growth mix across hyperscale and enterprise customers. Arista was also added to the S&P 100 in September 2026, a move that reflects its growing weight in large-cap U.S. equity indices just as management ties more of its outlook to AI-related revenue. The company's longer-range narrative projects US$21.4 billion in revenue and US$8.2 billion in earnings by 2029, requiring 26.6% yearly revenue growth and an earnings increase of about US$4.2 billion from US$4.0 billion today. Some of the lowest-ranked analysts had already assumed about US$18.6 billion of 2029 revenue and US$6.9 billion of earnings before this guidance, illustrating how differently Arista's AI exposure and long-term supply commitments can be read.
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Artificial Intelligence › AI Networking & Interconnect ▲Demand
Artificial Intelligence › Switching & Networking Silicon/Systems ▲Demand
ANET · Demand · Positive Arista raised 2026 revenue guidance to $12.60B, including at least $3.50B from AI-related business, on AI-driven cloud networking demand.
ANET · Capital · Positive Arista was added to the S&P 100 in September 2026, reflecting its growing weight in large-cap U.S. equity indices.
United States▲8impact 4
HPE Raises Fiscal 2027 Networking Outlook, Lands $1.2 Billion Vultr AI Order
Hewlett Packard Enterprise raised its fiscal 2027 networking revenue growth forecast to between high-teens and low-20s percent, up from the 14% to 17% projection it gave earlier in September, and secured a $1.2 billion order from cloud infrastructure provider Vultr for AMD-based artificial intelligence server racks paired with Juniper networking switches. The company also lifted its annual cost-synergy target from the Juniper Networks acquisition to $800 million by the end of fiscal 2028, up from at least $600 million, and projected Data Center Networking revenue to grow at a low-to-high 50s percent compound annual rate through fiscal 2029. Following the networking investor day presentation, Citigroup raised its price target on the stock to $92 from $76 while keeping a Buy rating, citing confidence in durable demand and expanding AI infrastructure orders. A cooler-than-expected U.S. jobs report added secondary momentum, with the Bureau of Labor Statistics reporting that employers added 29,000 nonfarm payroll jobs in September, trailing the 84,000 consensus estimate from economists polled by Dow Jones. HPE shares jumped 7.8% in the afternoon session and are up 189% since the beginning of the year, reaching a new 52-week high of $69.77 per share.
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Artificial Intelligence › AI Networking & Interconnect ▲Demand
Artificial Intelligence › Switching & Networking Silicon/Systems ▲Demand
HPE · Capital · Positive HPE lifted its Juniper cost-synergy target to $800 million and Citigroup raised its price target to $92.
HPE · Demand · Positive HPE landed a $1.2 billion Vultr AI server order and raised its fiscal 2027 networking revenue growth outlook.
Vultr Holdings, LLC · Demand · Positive Vultr placed a $1.2 billion order with HPE for AMD-based AI server racks and Juniper switches.
AMD · Demand · Positive Vultr's $1.2 billion order is for AMD-based AI server racks, a concrete product order for AMD chips.
C · Capital · Positive Citigroup raised its HPE price target to $92 from $76 while keeping a Buy rating.
United Statesimpact 4
Broadcom Guides Q4 Revenue to $34.8 Billion After Q3 Beat
Broadcom reported third-quarter fiscal 2026 non-GAAP earnings of $3.32 per share, up 96.4% year over year and 3.11% above the Zacks Consensus Estimate, with revenues surging 85.5% year over year to $29.59 billion and beating the consensus mark by 0.41%. AI semiconductor revenues jumped 221% year over year to $16.7 billion, representing 56% of total revenues, while Semiconductor Solutions revenues surged 127% year over year to a record $20.84 billion, or 70% of total revenues, and Infrastructure Software revenues increased 29% year over year to $8.75 billion, contributing the remaining 30%. For the fourth quarter of fiscal 2026, Broadcom expects revenues of approximately $34.8 billion, representing 93% year-over-year growth, including about $26.1 billion of semiconductor revenues and roughly $8.7 billion of Infrastructure Software revenues. The company raised its fiscal 2026 AI semiconductor revenue outlook to $58 billion, up 186% year over year and above its prior $56 billion view, and said it has secured supply to support approximately $115 billion of AI semiconductor revenues in fiscal 2027, with fiscal 2028 AI semiconductor revenues seen reaching $230 billion. Broadcom also generated record free cash flow of $13.67 billion, equal to 46% of revenues, paid $3.1 billion in dividends, reduced long-term debt by $5.6 billion, and its board approved a quarterly dividend of 65 cents per share.
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Artificial Intelligence › AI Compute & Accelerator Silicon ▲Demand
Semiconductors › Logic, Compute & Connectivity Processors Demand
Artificial Intelligence › Switching & Networking Silicon/Systems Demand
Artificial Intelligence › Custom Silicon / ASIC Demand
AVGO · Capital · Positive Broadcom beat Q3 estimates with EPS up 96.4% and guided Q4 revenue to $34.8B, plus record $13.67B free cash flow and debt reduction.
AVGO · Demand · Positive AI semiconductor revenues jumped 221% to $16.7B and the company raised its fiscal 2026 AI revenue outlook to $58B with supply secured for $115B in fiscal 2027.
United States
Canada▲impact 4
Celestica Eyes 2027 Ramp as Q2 Revenue Jumps 62%
Celestica Inc. reported second-quarter revenue growth of 62% year over year and an 83% rise in adjusted EPS, then raised its 2026 outlook and said revenue growth should accelerate again in 2027. The company expects its 1.6T networking programs to ramp significantly in 2027, is preparing to deliver custom racks for OpenAI, and expects its AMD Helios opportunity to ramp in the first half of next year, with management describing both as multibillion-dollar opportunities. Celestica trades at about 18.5 times forward earnings while consensus calls for roughly 75% EPS growth next year, though three customers accounted for 32%, 17% and 14% of Q2 revenue and roughly $1 billion of capital expenditures is planned for 2026. Hedge fund interest weakened slightly in the second quarter, with the number of funds holding the stock falling from 67 in Q1 to 63 in Q2 while the total value of their positions rose from approximately $4.38 billion to $4.84 billion. Management says customers are already discussing requirements for 2027, 2028 and even 2029, making the upcoming October 27 investor day particularly important.
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Artificial Intelligence › Switching & Networking Silicon/Systems ▲Demand
OpenAI · Demand · Positive Celestica is preparing to deliver custom racks for OpenAI, a multibillion-dollar opportunity.
AMD · Demand · Positive Celestica expects its AMD Helios opportunity to ramp in the first half of next year, described as a multibillion-dollar opportunity.
United States▲2
Coherent Jumps 10.5% After Bernstein Initiates With Outperform and $350 Target
Coherent shares jumped 10.5% in the afternoon session after Bernstein rated the materials and photonics company Outperform with a $350 price target, citing optical-module upside as data-center switches move to higher speeds. According to Streetinsider, Bernstein framed $350 as roughly 24% upside, valuing the stock at 22 times estimated 2028 earnings per share of $16, and argued optical-module demand should keep expanding with faster networking gear. Citi commentary tagging Coherent as an AI hardware beneficiary reinforced the bullish AI-infrastructure read-across, alongside investor focus on Coherent's PhotonLink optics platform and an AI security demo amid a broader bid in networking names. The move follows a 5.2% gain two days earlier on news that Coherent demonstrated scalable physical-layer security for artificial intelligence infrastructure developed alongside CUbIQ Technologies. Coherent is up 63.1% since the start of the year, but at $317.01 per share it still trades 25.7% below its 52-week high of $426.89 from June 2026.
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Artificial Intelligence › Optical Interconnect & DCI ▲Demand
Artificial Intelligence › AI Networking & Interconnect ▲Demand
Artificial Intelligence › Switching & Networking Silicon/Systems ▲Demand
United States▲
Coherent, Lumentum, Ciena Surge as Bernstein Initiates With Outperform
Optical networking stocks rallied Thursday after Bernstein initiated coverage of the group with an Outperform rating, calling the companies structural AI winners. Coherent jumped 11%, Lumentum rose 7%, Ciena gained 7%, and Arista added 0.4%. Coherent led the move after launching PhotonLink, an optics platform for AI infrastructure that packages its services, photonics technologies, and components including lasers, fibers, and detectors into one platform for AI data centers. The company said it already has 20 customer engagements split between co-packaged optic and near-packaged optic assemblies, plus five engagements in emerging chip-to-chip connectivity. The gains extend a strong 2026 rally for the group, with Coherent up 73%, Lumentum up 183%, Ciena up 62%, and Arista up 56% year to date.
About megatrends
Artificial Intelligence › Optical Interconnect & DCI ▲Technology
Artificial Intelligence › AI Networking & Interconnect ▲Technology
Artificial Intelligence › Switching & Networking Silicon/Systems ▲Technology
COHR · Capital · Positive Bernstein initiated coverage of Coherent with an Outperform rating as a structural AI winner.
COHR · Technology · Positive Coherent launched PhotonLink, an optics platform for AI infrastructure, with 20 customer engagements.
CIEN · Capital · Positive Bernstein initiated coverage of Ciena with an Outperform rating, calling it a structural AI winner.
LITE · Capital · Positive Bernstein initiated coverage of Lumentum with an Outperform rating, calling it a structural AI winner.
ANET · Capital · Positive Bernstein initiated coverage of the optical networking group with an Outperform rating, naming Arista among structural AI winners.