Arista's revenue rose to $3.0 billion in Q2 2026, up from $1.8 billion in late 2024.
IBM's revenue was $17.2 billion, but it cut its full-year forecast.
Investors favor Arista as AI data center spending grows.
What happened
Arista Networks reported $3.0 billion revenue for the quarter ended June 30, 2026, up from $1.8 billion in Q3 2024. IBM reported $17.2 billion for the same quarter but cut its 2026 full-year sales forecast.
Why it matters
Arista benefits as companies build AI data center infrastructure, with consistent quarterly growth and a forecast of $3.3 billion for Q3. IBM faces volatility from mainframe upgrade cycles and flat consulting, with its infrastructure segment down 7% year over year.
What to watch
The key question is whether Arista's growth can continue as AI buildouts proceed. Watch whether IBM's quantum computing bet, via HRL Laboratories acquisition, can offset weak traditional segments.
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Summaries like this, in your inbox every morning.
The article compares revenue trends between two AI-related companies. Arista shows steady growth, supported by demand for data center networking gear, while IBM sees cyclical swings from its mainframe and consulting businesses. IBM's infrastructure segment fell 7% year over year, and consulting was flat, prompting a forecast cut. Arista, by contrast, is benefiting from the same AI tailwind that is pressuring IBM.
IBM's strategic response includes the HRL Laboratories acquisition, suggesting a bet on quantum computing as a future growth driver. This move contrasts with Arista's focus on immediate AI infrastructure needs. The success of IBM's quantum bet is uncertain and likely years away, while Arista's near-term outlook appears stronger, with a Q3 revenue forecast of $3.3 billion.
The outcome for investors may hinge on whether Arista can sustain its growth trajectory as AI data center buildouts continue, and whether IBM's quantum investments can eventually offset weakness in its traditional segments. For now, the market seems to favor Arista's consistent performance over IBM's volatility, but the long-term picture remains open to change.
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