Key Takeaways
- Evercore ISI has elevated Arista Networks and IBM to tactical outperform status in anticipation of first-quarter earnings releases
- IBM’s earnings are scheduled for April 22; analysts project potential upside with revenue near $15.6B and earnings per share around $1.81
- Arista Networks will announce results May 5; forecasts suggest beats on $2.61B in revenue and $0.81 per-share earnings
- Arista has secured fresh contracts with Anthropic and Google, while its XPO platform debuted in March
- Combined capital expenditure from the five largest hyperscalers is projected to reach approximately $700 billion by 2026, representing 65% annual growth
Evercore ISI’s Amit Daryanani has elevated both Arista Networks and IBM to the investment firm’s tactical outperform roster. The timing aligns strategically with both companies’ upcoming first-quarter financial disclosures.
Daryanani characterizes both technology companies as presenting beat-and-raise scenarios, indicating his expectation that they will surpass Wall Street projections while simultaneously increasing their forward guidance.
IBM will announce its quarterly performance on April 22. Evercore’s analysis suggests the technology giant will exceed Street expectations calling for $15.6 billion in revenue and earnings of $1.81 per share.
International Business Machines Corporation, IBM
Daryanani highlighted that prevailing analyst estimates imply a 21% quarter-over-quarter revenue contraction. This would represent a more pronounced decline than the mid-teens percentage decreases IBM has historically experienced during first quarters.
IBM completed its Confluent acquisition ahead of schedule. According to Evercore, this transaction should contribute positively, albeit modestly, to software division revenue expansion.
The research firm anticipates IBM will revise upward its 2026 constant-currency revenue projections accordingly. Evercore’s internal models forecast constant-currency expansion exceeding 5% for the complete fiscal year, with software segment growth surpassing the 10% threshold.
Arista Networks: Artificial Intelligence Tailwinds and Strategic Customer Wins
Arista Networks will publish its results on May 5. Evercore projects the networking specialist will outperform Street targets of $2.61 billion in quarterly revenue and $0.81 in earnings per share.
The firm attributes this anticipated outperformance to intensifying artificial intelligence infrastructure demand and sustained strength across enterprise customer segments.
Evercore further anticipates Arista will project second-quarter revenue above the current Street consensus of $2.78 billion. At minimum, the firm expects Arista will elevate its full-year revenue guidance from the existing $11.25 billion benchmark.
Arista has captured additional business from Anthropic and Google, diversifying beyond its established client portfolio. Evercore identifies these as incremental revenue opportunities that should underpin continued expansion.
This past March, Arista introduced its XPO product line. Evercore views this platform as a significant growth catalyst as networking infrastructure transitions from 800-gigabit to 1.6-terabit transmission speeds.
Hyperscaler Investment Environment
Evercore’s Daryanani observed that aggregate capital investment among the five dominant hyperscale cloud infrastructure providers is tracking toward $700 billion in 2026.
This spending level represents approximately 65% year-over-year expansion. The magnitude of this infrastructure investment cycle provides substantial tailwinds for Arista’s revenue growth trajectory.
Evercore ISI maintains an Outperform rating on Arista Networks stock with a $200 price target.
Arista Networks will release its March quarter financial results on May 5, with IBM reporting its quarterly performance on April 22.
