Key Takeaways
- Arista Networks’s (ANET) Q3 revenue rose 58.5% to $3.66 billion, and it now guides to about $18.5 billion of revenue in 2027, well above the $16.4 billion analysts expected (this estimate is now revised to $18.5 billion).
- That’s strong evidence that the cloud builders Arista and Ciena (CIEN) both sell to are still raising their network spending.
- Ciena’s next fiscal year is limited by component supply more than by demand, so Arista’s read matters most for the $11.0 billion of revenue analysts expect from Ciena in fiscal 2028.
- Ciena traded at 23x forward earnings on Nov. 5, below its five-year average, and its December report is the next test.
Arista Networks just gave Ciena investors the best read they’ll get on cloud networking demand before Ciena reports in December. And it was a blowout.
Arista’s Q3 revenue rose 58.5% to $3.66 billion, its fastest growth since its IPO, and management guided 2027 revenue to about $18.5 billion.
Ciena stock, meanwhile, has fallen 24% in the past week and sits 61% below its June high. If the selling is a bet that cloud spending is cooling, Arista’s results show the opposite.
TIKR tracks 21 analysts on Ciena. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Ciena, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Ciena’s Analyst Ratings
Ciena’s forecast needs the cloud builders
On its fiscal Q3 call in September, Ciena’s management said about half its business now comes directly from hyperscalers.
Two customers each made up more than 10% of that quarter’s revenue. Arista relies on the same kind of buyer even more: Microsoft and Meta took 42% of its 2025 revenue.
So Ciena’s forecasts ride on the same budgets. Analysts expect its revenue to climb from $4.77 billion in fiscal 2025 to $11.0 billion in fiscal 2028 (the year ending October 2028), growth of 27% or more each year:
Arista just raised the bar
Going into the report, analysts expected Arista’s revenue to grow 47% this year, to $13.2 billion, and 40% in 2027, to $16.4 billion:
Arista beat both. Management now guides 2026 revenue to $13.3 billion, 48% growth, and it’s its fourth raise this year.
It guides 2027 to about $18.6 billion, growth of 38% to 40%. That 2027 figure is about 13% above what analysts expected going in, so those estimates have some climbing to do.
(For perspective, Arista guided 2026 revenue to $10.5 billion at its September 2025 Analyst Day.)
And the growth is speeding up: 35.1% in the first quarter, 37.7% in the second, 58.5% in the third. Arista also lifted its non-GAAP operating margin to 49.1% along the way.
Ciena’s next year is a supply question
Arista’s switches and Ciena’s optical gear do come out of different budgets, on different timelines. One Arista quarter won’t show up in Ciena’s orders dollar for dollar.
But the budgets overlap more than it looks. In August, Arista’s management said scale-across, the links that tie data centers to each other, makes up about 30% of its 2026 AI revenue target of at least $3.5 billion.
And for fiscal 2027, demand isn’t what holds Ciena back anyway. In September, management projected at least $8.3 billion to $8.4 billion of revenue and said it would be higher with more components.
It doesn’t expect supply and demand to balance before 2028. Analysts’ $8.43 billion is right at the top of that range.
So Arista’s quarter matters most for fiscal 2028, when supply should loosen, and the demand still has to be there.
Arista is guiding to 38% to 40% growth in 2027 from those same buyers, and that’s the best sign yet that it will be.
Ciena’s multiple has come way down
The selloff has taken a lot of air out of Ciena’s valuation. On Nov. 5, the stock traded at 23x forward earnings. That’s below its five-year average of 30x, and far from the 94x it hit in June:
The risk is concentration. Half its business comes straight from hyperscalers, so if one big buyer paused, Ciena would take a hard hit, whatever Arista reports.
The way I see it, the cloud buyers Ciena depends on are spending faster than anyone expected a week ago. At this price, investors are pricing in a slowdown that Arista’s numbers don’t show.
Ciena’s own report in December is the real test. Watch whether management raises its fiscal 2027 floor as more components arrive.
So what is Ciena stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Ciena could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
