Arista Networks (ANET) stock is falling 6% after the company's 2025 revenue guidance came in slightly below analysts' average outlook. However, ANET's fourth-quarter results and its Q1 revenue guidance did surpass analysts' mean estimates.

ANET markets computer network switches for data centers.

A Look at Arista's Q4 Results and Guidance

For Q4, Arista's earnings per share, excluding certain items, increased 25% versus the same period a year earlier to 65 cents, versus analysts' average estimate of 57 cents. The firm's revenue also climbed 25% year-over-year in Q4, coming in at $1.93 billion, compared with analysts' average estimate of $1.9 billion.

In 2025, ANET expects its revenue to increase 17%, versus its previous outlook of a 16% gain. However, analysts on average expected its sales to climb 19% this year.

But for the current quarter, the midpoint of the company's revenue guidance range came in at $1.95 billion, slightly above analysts' average outlook of $1.9 billion.

Banks' Reactions

In a note to investors, British bank Barclays called the company's 2025 guidance "conservative." Barclays believes that the company can raise its outlook later this year.

Calling the company's Q4 results generally "pretty clean," Morgan Stanley remains bullish on the company due to its $70 billion market and what the bank sees as ANET's strong software offerings. Morgan Stanley recommended buying the shares on weakness.

While we acknowledge the potential of ANET, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ANET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: The author owns shares of ANET but has no intention of trading them in the next 48 hours. This article is originally published at Insider Monkey.