Tom Lee of Fundstrat has added Arista Networks and JPMorgan to his core stock ideas for 2026. Joseph Terranova of Virtus Investment Partners endorsed the Arista pick, citing the company's participation in AI networking infrastructure buildout and accelerating revenue growth. Kevin Simpson of Capital Wealth Planning supported the JPMorgan selection, calling it best-in-breed and highlighting a potential IPO market rebound as a catalyst. Arista's second-quarter revenue rose 38% year over year, with full-year guidance pointing to 40% annual growth. The company's AI Fabrics networking gear now serves over 100 customers. However, analysts note risks from customer concentration and potential AI spending slowdowns. Arista trades at a forward non-GAAP price-to-earnings ratio of 45.33, nearly double the sector median.

Brown Brothers Harriman's BBH Select Mid Cap ETF highlighted Arista Networks as a leading performance contributor in its Q2 2026 investor letter. The cloud networking solutions provider returned 38.4% during the quarter, driven by strong first-quarter results with record revenue and free cash flow. Arista reported 54% growth when including deferred product revenue, though guidance fell short of high expectations due to supply chain shortages and extended customer acceptance cycles for new AI products. The company maintained gross margin guidance of 62% to 64% despite rising component costs. Management expressed confidence in the 2026 outlook and expects to add one or two new customers representing over 10% of revenue beyond Microsoft and Meta. At quarter-end, Arista held an 85-hedge-fund following.

Arista Networks reported FY 2025 revenue of nearly $9.0 billion, up 28.6% year-over-year, with net income of roughly $3.5 billion and a 39% net margin. The company, which provides data centre networking equipment, carries no debt and generated close to $4.3 billion in free cash flow. However, two customers represented approximately 16% and 26% of annual revenue, creating concentration risk. International Business Machines posted FY 2025 revenue of nearly $67.5 billion, growing 7.6% year-over-year, with net income of close to $10.6 billion. The company's net margin improved to approximately 15.7% from 9.6% the previous year as it shifted toward higher-value software offerings. IBM provides software, consulting, and infrastructure services with partnerships including Amazon and Microsoft.