Conviction / Shovels
ANET
Arista Networks
conviction
Arista crossed $3 billion in quarterly revenue for the first time and raised its full year outlook for the third time this year, to about $12.6 billion. The business is performing as well as anything in this group, but the shares sit near their high and two customers account for an unusually large share of sales.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $199.55 |
| 30-day move | +19.9% |
| Position in 52-week range | 100 |
| From the 52-week high | +2.7% |
| Average daily volume | $1.6B |
Why it is in the fund
Thesis
High-speed data center networking is the connective tissue for multi-agent AI systems that require massive east-west traffic.
Standing judgment
About 7% off a high set in premarket today, at roughly 43x forward. Best business, worst entry in the shovels bucket. The specific fragility is customer concentration on Microsoft and Meta, so Meta's capex posture reads straight through to this revenue line.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 86 | +10 | Raised 10 points because the evidence leg that was open a month ago has closed: a third consecutive guidance raise plus a hard AI fabric target confirmed the scale out story, leaving the entry as the only unresolved leg. | Q2 2026 reported 2026-08-04: first $3B quarter at $3.036B (+37.7% y/y) against $2.83B expected, EPS $1.02 versus $0.89, non-GAAP operating margin 49.9%, deferred revenue up to about $6.9B from $6.2B. FY26 guidance raised for the third time this year to about $12.6B (+40%), with an AI fabric target o |
| 2026-08-05 | 76 | flat | first v3 judgment (v2 score was uninformative, see L-001): Flawless execution and a third consecutive guidance raise, fully reflected in a price sitting at an all-time high the week after a 13% gap up. | Q2 2026 revenue $3.036B, first $3B quarter, up 37.7% year over year and 12.1% sequentially; non-GAAP EPS $1.02 versus $0.89 consensus; FY26 guidance raised a third time to $12.6B, about 40% growth; Q3 guide approximately $3.3B with non-GAAP EPS $1.06-1.08; FY26 operating margin guided 48-49%; supply |
| 2026-08-05 | 76 | -13 | first v3 judgment (v2 score was uninformative, see L-001): Flawless execution and a third consecutive guidance raise, fully reflected in a price sitting at an all-time high the week after a 13% gap up. | Q2 2026 revenue $3.036B, first $3B quarter, up 37.7% year over year and 12.1% sequentially; non-GAAP EPS $1.02 versus $0.89 consensus; FY26 guidance raised a third time to $12.6B, about 40% growth; Q3 guide approximately $3.3B with non-GAAP EPS $1.06-1.08; FY26 operating margin guided 48-49%; supply |
| 2026-07-31 | 89 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-30 | 90 | +8 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-29 | 82 | -3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-28 | 85 | -7 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-27 | 92 | +12 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-26 | 80 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-25 | 80 | -3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-24 | 83 | +9 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-23 | 74 | +2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-22 | 72 | -6 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 78 | +2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 76 | -13 | migrated from v2 (cause not recorded) | v2 `scores` row |