Arista Networks (ANET) and IBM (IBM) Earn Evercore’s Tactical Outperform Status Pre-Earnings

Key Takeaways

• Evercore ISI designated Arista Networks and IBM as tactical outperformers in anticipation of their Q1 earnings releases
• IBM’s April 22 report expected to surpass consensus projections of $15.6B revenue and $1.81 EPS
• Arista Networks’ May 5 earnings anticipated to exceed estimates of $2.61B in revenue and $0.81 per share
• Arista has secured fresh contracts with Anthropic and Google, while debuting its XPO solution in March
• Combined capital expenditure from the five largest hyperscalers projected to reach nearly $700 billion by 2026, marking 65% annual growth

Evercore ISI’s Amit Daryanani has designated both Arista Networks and IBM as tactical outperformers in his firm’s latest update. The selections arrive just ahead of each company’s first-quarter financial disclosures.

Daryanani characterized both organizations as presenting beat-and-raise scenarios, indicating his belief that they will exceed Wall Street forecasts and subsequently lift their forward guidance.

IBM will unveil its quarterly results on April 22. The investment firm anticipates performance above 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 the current Wall Street consensus suggests a 21% quarter-over-quarter revenue contraction. This would represent a sharper decline than the mid-teens percentage drop IBM has typically experienced during first quarters in previous years.

IBM successfully completed its Confluent acquisition ahead of schedule. According to Evercore, this transaction should provide a modest boost to the company’s software revenue trajectory.

The research firm anticipates IBM will elevate its 2026 constant-currency revenue guidance accordingly. Evercore projects full-year constant-currency expansion exceeding 5%, with the software division growing above 10%.

Arista Networks: Riding AI Infrastructure Wave

Arista Networks will present quarterly results on May 5. Evercore forecasts the networking specialist will surpass revenue expectations of $2.61 billion and per-share earnings estimates of $0.81.

The firm attributed the projected outperformance to robust AI-driven demand and sustained traction across enterprise markets.

Evercore also anticipates Arista will project second-quarter revenue above the prevailing consensus forecast of $2.78 billion. At minimum, the firm believes Arista will increase its full-year revenue outlook from the current target of approximately $11.25 billion.

Arista has captured new customer relationships at Anthropic and Google, diversifying beyond its established client portfolio. Evercore identified these as incremental opportunities that should fuel continued expansion.

This past March, Arista unveiled XPO, a new offering. Evercore views this product as a potential catalyst as networking infrastructure transitions from 800G to 1.6 terabit transmission rates.

Hyperscaler Investment Surge

Evercore’s Daryanani observed that aggregate capital investment among the five dominant hyperscale cloud platforms is trending toward $700 billion in 2026.

This projection reflects approximately 65% year-over-year expansion. The magnitude of this infrastructure spending serves as a fundamental driver supporting Arista’s growth outlook.

Evercore ISI maintains an Outperform rating on Arista Networks accompanied by a $200 price objective.

Arista Networks is slated to announce March quarter performance on May 5, with IBM following on April 22.