Key Takeaways
- Wall Street firm Evercore ISI has upgraded both Arista Networks (ANET) and IBM (IBM) to tactical outperform status before their Q1 reports
- IBM (IBM) releases results on April 22; analyst forecasts slight revenue upside from $15.6B consensus and EPS above $1.81
- Arista Networks (ANET) announces earnings May 5; firm anticipates beats on $2.61B revenue projection and $0.81 EPS forecast
- Arista (ANET) is securing fresh contracts with Anthropic and Google, having unveiled its XPO product line in March
- Combined capital expenditure from the five largest hyperscalers is projected to reach nearly $700 billion by 2026, reflecting 65% annual growth
Evercore ISI’s Amit Daryanani has elevated both Arista Networks and IBM to the investment firm’s tactical outperform category. The upgrades arrive just weeks before each technology company releases its first-quarter financial results.
Daryanani characterized both stocks as possessing a beat-and-raise profile, indicating his confidence that each will surpass Wall Street’s consensus projections and subsequently increase their forward guidance.
IBM plans to unveil its quarterly performance on April 22. The Evercore team anticipates results that exceed the Street’s revenue projection of $15.6 billion and earnings per share forecast of $1.81.
International Business Machines Corporation, IBM
Daryanani highlighted that Wall Street’s current revenue consensus suggests a sequential drop of 21% from the previous quarter. This decline would be more pronounced than the mid-teens percentage decreases IBM has historically experienced during first quarters.
The technology giant recently finalized its Confluent acquisition ahead of the anticipated timeline. According to Evercore’s analysis, this deal should contribute incrementally to software division revenue expansion.
The research firm projects IBM will revise upward its 2026 constant-currency revenue forecast based on this transaction. Evercore’s own model calls for constant-currency expansion exceeding 5% for the complete fiscal year, with the software segment growing above 10%.
Arista Networks: Artificial Intelligence Growth and Fresh Customer Wins
Arista Networks schedules its earnings announcement for May 5. Evercore projects the networking equipment provider will surpass revenue expectations of $2.61 billion and earnings per share estimates of $0.81.
The investment firm attributed the anticipated outperformance to robust artificial intelligence infrastructure demand and sustained traction within enterprise markets.
Evercore additionally forecasts that Arista will project second-quarter revenue beyond the prevailing consensus estimate of $2.78 billion. At minimum, the firm believes Arista will elevate its full-year revenue objective from the current approximate target of $11.25 billion.
Arista has been securing new contracts with Anthropic and Google, broadening its reach beyond its established customer portfolio. Evercore identified these as additional revenue opportunities that could bolster expansion in coming quarters.
This past March, Arista introduced its XPO product family. Evercore views this offering as a prospective growth catalyst as networking infrastructure transitions from 800G to 1.6 terabit transmission speeds.
Hyperscaler Investment Landscape
Evercore’s Daryanani observed that aggregate capital investment from the five dominant hyperscaler cloud companies is tracking toward $700 billion in 2026.
This spending level represents approximately 65% year-over-year expansion. The magnitude of these infrastructure investments provides a favorable environment supporting Arista’s anticipated growth trajectory.
Evercore ISI maintains an Outperform rating on Arista Networks shares with a $200 price target.
Arista Networks is slated to disclose its March quarter financial performance on May 5, while IBM will report on April 22.
