Erste Group Downgrades Arista Networks (ANET) Stock to Hold from Buy

Arista Networks Inc (NYSE:ANET) is one of the Best Fundamentally Strong Stocks to Buy. On November 10, Erste Group downgraded the company’s stock to “Hold” from “Buy.” As per the analyst, Arista Networks Inc (NYSE:ANET) has been building a cross-vendor ecosystem in order to integrate AI networks with computing infrastructure, which is expected to drive high revenue growth over the medium term, albeit at a slowing pace.

Furthermore, the firm opines that operating margins are projected to dip marginally next year, and the stock seems to be expensive. In its Q3 2025 earnings call, the company stated that its Etherlink portfolio demonstrates its accelerated networking approach, resulting in a single point of network control for zero-touch automation, trusted security, traffic engineering, and telemetry to improve compute and GPU utilization.

Arista Networks Inc (NYSE:ANET) achieved ~$2.31 billion in Q3 2025, with software and services making up ~18.7% of revenue. Its product revenue rose $387.9 million, or 25.5%, for the 3 months ended September 30, 2025 as compared to the same period in 2024. This increase demonstrates higher demand for switching and routing platforms throughout its customer base.

Its non-GAAP gross margin came in at 65.2%, influenced by a favorable mix and inventory benefits. Arista Networks Inc (NYSE:ANET)’s non-GAAP net income came in at $962.3 million as compared to $769.0 million in Q3 2024. It saw 25% non-GAAP EPS growth in Q3 2025, showcasing not only healthy demand but also disciplined execution of the strategic roadmap.

While we acknowledge the potential of ANET as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.