Key points:
- Arista Networks hit record revenue of $9 billion in 2025, driven by AI and campus networking growth.
- Memory costs have spiked, forcing Arista to absorb higher expenses and consider selective price increases.
- AI networking revenue is set to double to $3.25 billion in 2026, with strong partnerships in the ecosystem.
Arista Networks wrapped up a strong fourth quarter in 2025 with record-breaking revenue of $9 billion, marking a 28.6% jump from the previous year. CEO Jayshree Ullal called it a defining year, driven by the momentum of generative AI, cloud, and enterprise expansion. The company also surpassed 150 million cumulative port shipments in Q4.
A significant boost came from Arista’s growing presence in campus and wide area networking (WAN). The vendor reported $750 million to $800 million in run-rate revenue from campus and routing business and set an aggressive goal of $1.25 billion for 2026. Ullal highlighted the success of the 7800 R4 spine, which offers up to 460 terabits of capacity for high-demand AI workloads and routing use cases. This segment now accounts for about 18% of revenue.
However, not all news was positive. Arista is feeling the squeeze from soaring system memory costs — an issue many tech vendors are grappling with. Ullal described the situation bluntly, saying the prices are "horrendous," exponentially higher, and expected to last multiple years. While Arista absorbed much of the cost burden in 2025, it plans to pass some of it on through selective price increases on memory-intensive products in 2026.
Despite the pressure, Arista remains optimistic. The company reported a 28.6% increase in gross margin year over year, and analysts like William Blair’s Sebastien Naji believe the company can manage the cost impacts. Still, Arista has increased its purchase commitments for memory to $6.8 billion from $4.8 billion in the prior quarter, acknowledging that additional supply will be needed to meet demand.
On the AI front, Arista has doubled down on Ethernet networking as the backbone of AI infrastructure. The vendor’s core cloud, AI, and data center products span speeds from 10 gigabit to 800 gigabit Ethernet, with 1.6 terabit migration on the horizon. The company expects a further boost once the multivendor Ethernet for Scale-Up Networking (ESUN) specification is finalized, likely by the fourth quarter of 2026.
Partnerships with key players like NVIDIA, AMD, Anthropic, OpenAI, and others are anchoring Arista’s AI strategy. The vendor expects AI networking revenue to jump from $1.6 billion in 2025 to $3.25 billion in 2026, underscoring how quickly this market is accelerating.
For Microsoft and Windows Server users, this growth matters. Arista’s advancements in Ethernet networking — especially for AI and hyperscale environments — could shape how data centers connect and scale, potentially affecting Microsoft’s cloud infrastructure and Azure performance. As companies push for faster, more efficient networking to support AI workloads, the technology Arista develops could have ripple effects across the broader Microsoft ecosystem.
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