Arista Networks stock plummeted 11.1% due to new tariffs, impacting sales and margins

From Yahoo Finance: 2025-04-03 18:05:00

Arista Networks (NYSE: ANET) stock dropped 11.1% Thursday due to new tariff policies from the Trump administration. The S&P 500 fell 4.9%, and the Nasdaq Composite sunk 6%. The new tariffs will have a significant impact on global trade and may increase costs for Arista Networks, affecting business performance and analyst expectations.

The Trump administration announced a 10% import tax on foreign-sourced products starting April 5, with additional reciprocal import taxes on companies with large trade deficits on April 9. Arista Networks relies on outside manufacturers for its networking hardware, so higher costs are expected. Despite strong sales growth, the company could see lower performance due to the tariffs.

Arista Networks guided for sales between $1.93 billion and $1.97 billion in the first quarter, with a targeted adjusted gross margin of 63%. While the tariffs won’t impact Q1, they could affect future sales and margins. The company may struggle to meet analyst expectations for the rest of the year due to the tariff outlook.

Investors are concerned about the impact of new tariffs on Arista Networks’ performance and stock price. The company’s reliance on outside manufacturers for networking hardware could lead to increased costs, affecting sales growth and margins. The market reacted strongly to the news, with Arista Networks stock taking a significant hit.



Read more at Yahoo Finance: Why Arista Networks Stock Plummeted Today