What were Arista's and IBM's operating margins for the quarter ended June 30, 2026?

Arista reported a 45% operating margin, while IBM reported a 15% operating margin for that quarter.

Why did IBM cut its 2026 sales forecast?

IBM cut its 2026 full-year sales forecast as customers shifted spending toward AI data center buildouts, such as Arista, amid supply shortage concerns.

What is IBM doing to boost future growth?

IBM completed the acquisition of HRL Laboratories in summer 2026 to advance its work in quantum computing, which it believes could revolutionize the computing industry.

AI Stocks & MarketsTop Companies' AI MovesAI Business & IndustryTop Companies AISep 6, 2026Sep 7, 2026, 06:30 JST

Arista revenue climbs to $3.0B in Q2 2026, IBM cuts outlook

Send on LINE

3 Key Points

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.

Not sure about something? Ask the AI

Questions and answers are published on this page.

Summaries like this, in your inbox every morning.

Get news like this every morning, free

Context & Analysis

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.

FAQ

What were Arista's and IBM's operating margins for the quarter ended June 30, 2026?: Arista reported a 45% operating margin, while IBM reported a 15% operating margin for that quarter.
Why did IBM cut its 2026 sales forecast?: IBM cut its 2026 full-year sales forecast as customers shifted spending toward AI data center buildouts, such as Arista, amid supply shortage concerns.
What is IBM doing to boost future growth?: IBM completed the acquisition of HRL Laboratories in summer 2026 to advance its work in quantum computing, which it believes could revolutionize the computing industry.

AI news that matters for your work, delivered every morning.

Pick your industry and the AI tools you use, and get news related to your work every day.

Get it free

Free · 30 seconds with Google · unsubscribe anytimeWhat is AIToday? →

Ask AI

Ask AI anything about this article. The AI reads this article, earlier AIToday articles, and Wikipedia, and cites its sources. Q&As are published on this page for other readers too.