Arista Networks Inc (NYSE:ANET) was downgraded by Erste Group to “Hold” from “Buy.” The company is focusing on building a cross-vendor ecosystem to integrate AI networks with computing infrastructure for revenue growth. Operating margins are expected to dip next year, and the stock is considered expensive.

In Q3 2025, Arista Networks Inc (NYSE:ANET) reported ~$2.31 billion in revenue, with software and services contributing ~18.7%. Product revenue increased by $387.9 million, showing higher demand for switching and routing platforms. The non-GAAP gross margin was 65.2%, with non-GAAP net income at $962.3 million and 25% non-GAAP EPS growth.

While ANET has investment potential, Erste Group believes other AI stocks offer greater upside potential with less downside risk. For those seeking undervalued AI stocks benefiting from tariffs and onshoring trends, consider exploring the best short-term AI stock.

Read more at Yahoo Finance: Erste Group Downgrades Arista Networks (ANET) Stock to Hold from Buy