Arista Networks was highlighted as a Zacks Bull pick amid strong positioning in AI networking infrastructure.

Chicago, IL – September 16, 2026 – Zacks Equity Research has named Arista Networks, Inc. (ANET) as its Bull of the Day and Yum! Brands, Inc. (YUM) as its Bear of the Day. The firm also provides analysis on NVIDIA Corporation (NVDA) and Broadcom Inc. (AVGO).

Arista Networks, Inc. stands out as a high-tech, picks-and-shovels AI infrastructure stock that more than doubled both its revenue and earnings between 2022 and 2025. Operating directly with AI hyperscalers Microsoft and Meta, alongside other major technology firms, Arista is projected to sustain its momentum with over 35% revenue and earnings growth in 2026, followed by approximately 25% expansion next year. This optimistic outlook was reinforced by another strong beat-and-raise quarter reported in early August. Consistent upward EPS revisions have earned ANET a Zacks Rank #1 (Strong Buy), extending a notable streak of improving estimates as the company capitalizes on the AI data center boom and broader technology trends.

As a backend technology infrastructure provider, Arista designs and manufactures much of the critical, high-speed technological “plumbing” that massive AI data centers depend on. This positioning allows investors to bypass the need to select individual front-end AI winners like OpenAI, Anthropic, or Google, which are currently competing fiercely in the AI arms race. Instead, Arista supplies the foundational networking gear that enables these colossal facilities to communicate at extreme speeds. When companies like Microsoft and Meta train AI models, thousands of chips must continuously exchange data; Arista’s switches and related hardware serve as the digital highways facilitating this traffic. Its product suite, including high-speed Ethernet switches, operates as vital behind-the-scenes components that help AI data centers operate at peak performance.

“Customers see networking as the central nervous system for infrastructure from the client to campus to data and AI centers,” Arista CEO Jayshree Ullal noted in prepared second-quarter remarks. Microsoft and Meta rank among Arista’s largest clients, underscoring the company’s best-in-class offerings and its ability to compete effectively against rivals such as Cisco. The rapid expansion of cloud computing, big data, and, most critically, artificial intelligence positions Arista to continue thriving as these sectors drive economic and market growth. Goldman Sachs projects that total global AI capital expenditure will reach $7.6 trillion between 2026 and 2031 across compute, data centers, and power. AI hyperscalers alone are expected to allocate approximately $800 billion toward AI-related capex in 2026, with further increases anticipated in 2027.

Financially, Arista maintains a robust balance sheet, generating exceptional free cash flow growth. The company holds $13.3 billion in cash and equivalents and $23.7 billion in total assets against near-zero debt and $8.9 billion in total liabilities. Revenue surged from $4.38 billion in 2022 to $9.00 billion in 2025, following a similar doubling between 2016 and 2021. GAAP earnings per share more than tripled over the same recent period, rising from $1.07 in 2022 to $2.75 in 2025. On August 4, the company surpassed second-quarter earnings estimates by 15% and raised its guidance after recording its first $3 billion quarter, driven by the ongoing success of its Arista 2.0 platform strategy. Following this release, Arista’s third-quarter earnings estimate jumped 19%, its fiscal 2026 EPS forecast increased by 11%, and its fiscal 2027 outlook rose by 14%. These consistent upward revisions have secured its Zacks Rank #1 designation and extended a five-year streak of beating EPS estimates.

A detailed analyst report on Zacks.com outlines a concise bull case: “Arista strengthened its position in AI networking as enterprises and hyperscale customers expand Ethernet-based AI infrastructure.” During the second quarter of 2026, the company exceeded 100 cumulative AI fabric customers using Etherlink switches, compared with only a handful of early adopters in 2024. Management also expects AI revenue to reach at least $3.6 billion in 2026, supported by scale-up, scale-out and scale-across deployments. Looking ahead, Arista is forecast to increase revenue by 39% in fiscal 2026 (following 29% growth last year) and 26% in 2027 to reach $15.80 billion. Adjusted EPS is projected to climb 36% in 2026 and 24% the following year to $4.99 per share, with the bottom line expected to exceed $6.00 per share in fiscal 2028.

Over the past decade, ANET has appreciated approximately 3,500%, significantly outperforming the Zacks Technology sector’s ~485% gain and all Magnificent 7 tech stocks except Nvidia. In 2026 alone, the stock has risen roughly 47%, surpassing the broader tech sector’s 18% advance and leaving major clients Microsoft and Meta in the dust. Although the stock has pulled back approximately 9% from its early-August peaks, it has found technical support at its 50-day moving average as of Monday, September 14, and currently trades at neutral RSI levels. The average Zacks price target still implies 30% upside. While Wall Street has historically paid a premium for ANET, the stock now trades at a 25% discount to its all-time highs at 43.6 times forward 12-month earnings. When adjusted for its earnings growth trajectory, it sits 50% below its peaks, carrying a PEG ratio of 1.9. Despite prevailing fears of an AI bubble, $750 billion in new AI capital expenditure initiatives were announced in August alone, adding to a multi-year pipeline already measured in trillions of dollars. All factors considered, Arista appears to be one of the stronger long-term buy-and-hold candidates within the AI infrastructure sector.

Yum! Brands, Inc. serves as the parent company behind restaurant chains KFC, Taco Bell, and Habit Burger & Grill. However, Yum’s earnings outlook has trended downward over recent years as it contends with persistent headwinds affecting the fast-food industry. In an effort to adapt, the company recently divested one of its iconic but struggling brands, Pizza Hut. A recent wave of downward earnings revisions has assigned YUM a Zacks Rank #5 (Strong Sell).

Yum! Brands franchises or operates more than 44,000 locations across 150 countries. In mid-June, the company announced definitive agreements to sell Pizza Hut for an aggregate $2.7 billion, subject to certain purchase price adjustments. “Pizza Hut, excluding Mainland China, will be acquired by LongRange Capital, a private equity firm with a customer-centric and operationally oriented approach, and Pizza Hut in Mainland China will be acquired by Yum China Holdings, Inc. (YUMC),” the filing stated.

The company faces multiple pressures impacting both its Wall Street standing and consumer base. Leadership is navigating inflation that disproportionately affects lower-income diners, shifting dietary preferences, and the growing popularity of GLP-1 weight-loss medications. While Yum remains projected to deliver solid revenue and earnings growth in 2026 and 2027, the persistent downward revisions justify its current Strong Sell rating and reflect a longer-term pattern of negative estimate adjustments. Over the past five years, YUM’s stock has gained only 10%, lagging far behind the S&P 500’s ~75% rally. Furthermore, the Retail – Restaurants industry ranks in the bottom 34% of approximately 250 Zacks industry groups. Given these dynamics, investors seeking exposure to the market may be better served looking elsewhere until Yum demonstrates a clear path to recovery.

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