I just saw this article:
http://fortune.com/2016/04/12/datera-cloud-storage-funding/?..
I am surmising that the reason ANET is down today is that this start-up would be competing for ANET’s business.
Does anyone else share this concern?
Also, I thought it interesting that one of the individuals providing funding is a co-founder of ANET.
az5speedy,
Arista and other network gear suppliers are down because Jupiter broadcasted a lower Q1. They are blaming demand issues in the enterprise and slower traction for their newer products.
Since people don’t know how far to gauge general demand across the industry vs specific demand for their products we see sell offs across all the network suppliers, and that includes Cisco and Arista.
Optical equipment suppliers such as Infinera and Ciena are also following the trend down, although to a lesser extent.
However, to truly gauge demand you only have to go to the suppliers of components to these system providers. If their demand is down, then there is likely an industry-wide problem. However, if their demand is up, then there is likely a company-specific problem when you see someone tout lower demand issues.
Here’s is one example on where to find that info, from NPTN - a low level componet supplier:
http://finance.yahoo.com/news/edited-transcript-nptn-earning…
Moving on to the business, we believe that the industry has entered an expansion cycle where CapEx for 100-gigabit and beyond deployments is expanding globally for both telecom and data center applications, and that these two segments are in sync. For telecom and inter-data center interconnections, coherent transmission is the technology of choice, providing an efficient path from 100 gigabit to 400 gigabit.
We are seeing an acceleration of deployments throughout the ecosystems we serve. Even considering the 21,000,100 gigabit ports released last quarter by China Mobile, this acceleration is stronger than we might’ve expected as customers’ forecast expand. We are similarly seeing strong growth in the data center interconnect market, again, leveraging NeoPhotonics’ 100-gigabit product suite. These points lead to our expectations for strong performance in the first quarter of 2016 with these deployments and additional 100-gigabit network deployments around the world.
Due to the strengthening demand and strong volume growth for both our long-haul and metro 100-gigabit coherent products, together with strong book to bill, virtually all existing production capacities for these products are now booked out. And we are now in the process of adding capacity at module level, component level and ship level to keep up with demand acceleration. Over the past year and a half, we have almost tripled capacities for coherent receivers and ultra-narrow line with lasers, and we are continuing to expand capacities for these products now. For 2016, as a result, we are investing in capacity expansion at a higher level, which Ray will discuss.
So with that I think you can rest a little easier on Arista unless they happen to tell you otherwise. Demand for low level equipment which goes into the construction of devices sold by the system vendors are all still there.
Best,
–Kevin
I should also point out NPTN is also down on the news - an indication that the market fears an industry-wide problem vs what NPTN had already told them about the actual demand problem they were having - a problem of capacity and not being able to keep up.
Oh well. That is market logic for you 
Best,
–Kevin
Many thanks Kevin…for both of your responses to my inquiry.
As always, well-thought out and informative.
az5speedy
Again,
Thanks Kevin.
I have held some ANET shares since March when I bought at $63. Bought a little more today.
Frank