Effective Execution and Strong Results Lifted Arista Networks (ANET) in Q3

Brown Brothers Harriman, an investment management company, released its Q3 2025 investor letter for the BBH Select Series - Mid Cap Fund. A copy of the same can be downloaded here. In the quarter, the fund decreased by -0.9% on a total return basis compared to the Russell Midcap Index’s 5.3% return. The Fund has decreased by a total return of -1.8%, YTD, compared to 10.4% for the Index. The third quarter experienced a boost in the low-quality rally that started late last year and gained momentum throughout 2025. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, BBH Select Series - Mid Cap Fund highlighted stocks such as Arista Networks, Inc. (NYSE:ANET). Arista Networks, Inc. (NYSE:ANET) is a technology company that engages in the development and distribution of data-driven, client-to-cloud networking solutions. The one-month return of Arista Networks Inc (NYSE:ANET) was -0.20%, and its shares gained 21.67% of their value over the last 52 weeks. On December 09, 2025, Arista Networks, Inc. (NYSE:ANET) stock closed at $130.04 per share, with a market capitalization of $163.757 billion.

BBH Select Series - Mid Cap Fund stated the following regarding Arista Networks, Inc. (NYSE:ANET) in its third quarter 2025 investor letter:

"For the quarter, the Fund’s largest positive contributors were Arista Networks, Inc. (NYSE:ANET) and Advanced Drain age Systems Inc. (Advanced Drainage).

Arista returned 42.4% during the quarter, ending as our fifth-largest position with a weight of 4.9%. Arista is the leading provider of data center switches to cloud network and AI customers. Arista is executing extremely well and reported strong second quarter results, with revenue, margins, earnings per share (EPS), and qualitative commentary, all above expectations. In addition, Arista raised revenue guidance for all of 2025 to 25%, up from 17% previously, and provided initial conservative guidance of 14% growth in 2026. Arista also announced they will exceed targets for both their AI and Campus product solutions in 2025. At the recent investor day, CEO Jayshree Ullal was not shy about noting advan tages vs. rivals and future opportunities ahead. AI revenue, targeted at $1.5 billion this year, is expected to be $2.75 billion next year, growing 60% to 70%, which means AI will be about 25% of revenue. Looking beyond 2026, Arista gave a target of “mid-teen” growth through 2029. This is similar to their long-term guidance three years ago, which they significantly exceeded at a 27% CAGR. "

Arista Networks, Inc. (NYSE:ANET) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 92 hedge fund portfolios held Arista Networks, Inc. (NYSE:ANET) at the end of the third quarter, which was 81 in the previous quarter. In the third quarter of 2025, Arista Networks Inc (NYSE:ANET) reported revenue of $2.3 billion, up 27.5% year-over-year, exceeding expectations. While we acknowledge the potential of Arista Networks, Inc. (NYSE: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.

In another article, we covered Arista Networks, Inc. (NYSE:ANET) and shared the list of good stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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