BofA said Arista’s 10-K filing indicated that Microsoft (MSFT) accounted for 26% of the company’s total 2025 revenues, while Meta Platforms (META) accounted for 16%, and highlighted implications of the contributions.
BofA kept its Buy rating and $185 price target on Arista’s stock.
Analysts led by Tal Liani said they previously assumed the opposite contribution between the two, given Microsoft’s delay in migrating from InfiniBand to Ethernet for AI back-end networks.
The analysts noted that Microsoft did not yet deploy Ethernet at scale for AI back-end networks in 2025 with only less than 100K graphics processing unit, or GPU, deployments, but still grew an impressive 67% year-over-year, or about $1B on a dollar basis.
This growth is almost purely attributed to front-end switching, which supports management’s claims for strong pull through from back-end buildouts, according to the analysts.
“This bodes well for Arista in 2026, as Microsoft ramps its Ethernet back-end deployments and as Arista retains meaningful share, together with Nvidia, on limited participation of white box deployments at Microsoft. We flag the disparity between the significant ramp in deferred revenues versus the slower revenue ramp, which increases the potential for large revenue recognition as Microsoft reaches certain deployment milestones at their Fairwater data centers,” said Liani and his team.
White box networking refers to using unbranded, commodity hardware switches combined with independent, often open-source, network operating systems. A white box switch is a network switch that is assembled from standardized commodity parts.
The analysts noted that Meta grew 41% year-over-year in 2025, supported by large Ethernet back-end deployments, with Arista present in the Leaf and Spine layers, while Celestica and Accton are mostly in the top-of-rack layer.
Leaf and spine is a two-layer network topology designed for high-speed communication in data centers.
The analysts added that while the growth is impressive and supported by the strong capital expenditure, or capex, they believe it reflects the continued share losses at Meta, as both Nvidia (NVDA) and white box vendors gain share. At a high level, Arista has limited competition in spine switching, large clusters, and modular switches. Arista is also strong at Meta with its 7800 switch that carries routing capabilities, the analysts noted.
“However, as Meta’s FBOSS [Facebook open switching system] software improves over time, we see white boxes taking more share over time, and the recent multi-year agreement of Nvidia with Meta to supply GPUs also presents share loss risk, as Nvidia tends to dominate switching deployments of its own GPU clusters,” said Liani and his team.
The analysts noted that the market share and growth dynamics at Arista are being skewed by the significant $2.5B increase in annual deferred revenues. Liani and his team said that while they point to share losses at Meta, based on reported revenues, the real trends might be somewhat better if orders are booked as deferred revenues instead of being recognized as revenues until certain milestones are met.
“In addition, we believe share losses exist and are currently masked by the high capex tide, but we also expect 2026 to be a strong year for switching and for Arista accordingly, with revenue growth likely exceeding 30% YoY vs. management’s 25% guidance. Agentic AI is driving infrastructure spending up and the Cloud Titans are catering to future needs by building capacity ahead of time,” the analysts added.