Key Highlights
- Evercore ISI has elevated Arista Networks and IBM to tactical outperform status in advance of their quarterly results
- IBM’s earnings date is April 22; analysts project potential upside with revenue reaching $15.6B and EPS hitting $1.81
- Arista Networks announces results May 5; firm anticipates outperformance on $2.61B revenue and $0.81 EPS projections
- Arista has secured fresh contracts with Anthropic and Google, following the March debut of its XPO product line
- Combined capital expenditures among the five largest hyperscalers approach $700 billion for 2026, representing 65% annual growth
Evercore ISI’s Amit Daryanani has upgraded both Arista Networks and IBM on the firm’s tactical outperform roster. The timing aligns with the upcoming first-quarter financial disclosures from both technology companies.
Daryanani characterized both stocks as possessing beat-and-raise potential, indicating his projection that each will surpass Street estimates while lifting future guidance.
IBM plans to unveil its quarterly performance on April 22. Evercore anticipates results that exceed Wall Street’s revenue projection of $15.6 billion and earnings per share forecast of $1.81.
International Business Machines Corporation, IBM
Daryanani highlighted that existing Street estimates suggest a 21% quarter-over-quarter revenue decline. This would mark a sharper contraction compared to the mid-teens percentage decreases IBM has historically experienced during first quarters.
IBM completed its Confluent acquisition ahead of schedule. Evercore believes this transaction will contribute positively to software division revenue expansion.
The research firm anticipates IBM will revise upward its 2026 constant-currency revenue projections accordingly. Evercore forecasts constant-currency expansion exceeding 5% for the complete fiscal year, with software segment growth surpassing 10%.
Arista Networks: AI Infrastructure and Customer Expansion
Arista Networks unveils results on May 5. Evercore projects the networking specialist will eclipse revenue expectations of $2.61 billion and earnings per share consensus of $0.81.
The firm attributed the anticipated outperformance to robust artificial intelligence infrastructure demand combined with sustained enterprise market traction.
Evercore further anticipates Arista will project second-quarter revenue beyond current Street consensus of $2.78 billion. The firm believes Arista will elevate its full-year revenue objective from approximately $11.25 billion.
Arista has captured additional business from Anthropic and Google, broadening its footprint beyond established customer relationships. Evercore identified these contract wins as supplementary growth catalysts for future quarters.
During March, Arista introduced its XPO product offering. Evercore views this platform as a significant growth accelerator as networking infrastructure transitions from 800G to 1.6 terabit transmission speeds.
Hyperscaler Investment Environment
Evercore’s Daryanani observed that aggregate capital investments among the five dominant hyperscaler cloud operators are nearing $700 billion for 2026.
This spending level reflects approximately 65% expansion on an annual basis. The magnitude of these infrastructure investments provides foundational support for Arista’s growth trajectory.
Evercore ISI maintains an Outperform rating on Arista Networks accompanied by a $200 price target per share.
Arista Networks will disclose its March quarter financial performance on May 5, with IBM reporting on April 22.
