Arista Networks vs. Arm: Comparing Revenue Growth Trajectories for These Artificial Intelligence Companies

Robert Izquierdo, The Motley Fool

Sun, August 9, 2026 at 10:29 PM GMT+3 3 min read

Arista Networks: A Pattern of Consistent Sequential Revenue Increases

Arista Networks (NYSE:ANET) primarily generates revenue by designing, promoting, and distributing advanced cloud networking hardware and software applications to large-scale enterprise customers and major internet service providers across global markets.

While introducing the new 7060XE7 Series networking hardware portfolio during June 2026, it generated a 40% net income margin and $1.1 billion in free cash flow for the quarter ended June 30, 2026.

Arm: Fluctuating Quarter-Over-Quarter Revenue Trends

Arm Holdings (NASDAQ:ARM) primarily generates revenue by conceptualizing, engineering, and licensing foundational central processing unit designs and related systems intellectual property to global technology manufacturers and original equipment manufacturers.

It became the subject of multiple federal securities fraud investigations during May 2026. It reported a 21% net income margin alongside $694.0 million in free cash flow for the quarter ended June 30, 2026.

Why Revenue Performance Matters for Investors Evaluating These Stocks

Revenue functions as a fundamental baseline indicator of whether a commercial business is successfully attracting active customers and expanding its total financial sales footprint over time.

Examining Quarterly Revenue for Arista Networks and Arm

Data source: Company filings. Data as of Aug. 7, 2026.

Foolish Take

A look at the revenue trends of Arista Networks and Arm Holdings provides investors with key insights. The former's consistent quarter-over-quarter sales growth indicates the strong demand it's seeing for its offerings, thanks to the rapid expansion of the artificial intelligence sector.

Arm is experiencing a more typical year-over-year growth trajectory as its tech focus has been historically around mobile devices. The company has now expanded into solutions for AI-centric data centers. Its data center royalties more than doubled year over year in the second quarter, indicating rising demand for its solutions in this market. Now that Arm is pivoting more towards AI, its sales growth should start to look different from the trend seen over recent quarters.

Even so, Arm stock has fallen since shares hit a 52-week high of $452.70 in June as investors took profits. Despite the price drop, Arm's valuation remains elevated at a forward price-to-earnings ratio of 128.

Arista Networks had a spectacular second quarter as revenue hit $3 billion for the first time. That contributed to shares reaching a 52-week high of $214.89 in August.

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Robert Izquierdo has positions in Arista Networks and Arm Holdings. The Motley Fool has positions in and recommends Arista Networks and Arm Holdings. The Motley Fool has a disclosure policy.

Arista Networks vs. Arm: Comparing Revenue Growth Trajectories for These Artificial Intelligence Companies was originally published by The Motley Fool