Nvidia's networking hit $17.5 billion, more than Cisco's product sales; Arista Networks reports Tuesday
Nvidia's networking revenue hit $17.5 billion last quarter, more than Cisco's entire product line, and its switches now follow the chip vendor into clusters that never bought an Nvidia GPU. Arista, whose two anchor customers are 42% of revenue, reports Tuesday.
Vincent Jiang · 3 min read
November 1, 2026. Two models of selling the AI network, the bundle and the best-of-breed, get their first head-to-head reading at an earnings call on Tuesday.
Nvidia paid $6.9 billion for the wires, and the wires now outsell all of Cisco
Start with what changed. Nvidia−3.89% — Nvidia, down 3.89 percent today, the AI chip company, paid $6.9 billion for networking specialist Mellanox in 2019 to sell datacenter systems rather than chips 1. In the May-July quarter its networking revenue topped $17.5 billion, more than Cisco's−3.77% — Cisco, down 3.77 percent today entire product revenue of $17.3 billion over the same period, and The Register reports Nvidia now sells more datacenter Ethernet than any other vendor 1.
One Nvidia line beat all of Cisco's products last quarter
Data
| Value | |
|---|---|
| Nvidia networking | $17.5B |
| Cisco all products | $17.3B |
| Arista total revenue | $3.04B |
The milestone is arithmetic, but the mechanism behind it is the story. Every GB200 NVL72 rack ships with nine NVSwitch trays that fuse 72 GPUs into one logical GPU, so buying the rack buys the switch 1. Dell'Oro Group analyst Sameh Boujelbene estimates NVSwitch is now roughly one-third of Nvidia's networking revenue, up from nearly zero two years ago 1.
Customers choose Nvidia for its tightly integrated compute and networking architecture because it speeds time to market, she says, and Recursion chief technology officer Ben Mabey bought his interconnect from the same vendor as his GPUs for exactly that reason 1. Meta's−1.65% — Meta, down 1.65 percent today million-GPU Prometheus site in New Albany, Ohio runs Nvidia Spectrum-X Ethernet, as did Musk's Colossus cluster 1.
The same two buyers feed both machines
Then NVLink Fusion. Marvell−9.25% — Marvell, down 9.25 percent today, Qualcomm−10.68% — Qualcomm, down 10.68 percent today, Arm−9.44% — Arm, down 9.44 percent today, Fujitsu, MediaTek and d-Matrix plan chips built on Nvidia's interconnect, and those chips still need Nvidia's NVSwitch trays, which Nvidia has licensed to nobody 1. The switch money now follows the chip vendor, into clusters that never bought an Nvidia GPU.
Which brings the charge against Arista Networks−7.76% — Arista Networks, down 7.76 percent today, the best-of-breed Ethernet maker reporting Q3 results Tuesday after the close 2. One end customer took 26% of Arista's fiscal 2025 revenue and another 16%, 42% from two buyers, both above 10% every year since fiscal 2023, per its annual report as recirculated on X this week 2. TradingKey names them independently: Microsoft−1.38% — Microsoft, down 1.38 percent today and Meta, Arista's only 10%-plus anchors 3. Those are the same buyers running Nvidia Spectrum-X in their training clusters 1. Arista's growth and Nvidia's attach machine drink from the same well.
Arista's exhibits: a record quarter, raised guidance, a $3.5 billion AI target
Arista's record says the business grows either way. Revenue hit a record $3.04 billion in the June quarter, up 37.7%, the first $3 billion quarter in company history, and fiscal 2026 guidance was raised to $12.6 billion, 40% growth 4. Arista counts more than 100 cumulative Etherlink AI fabric customers and targets at least $3.5 billion in AI fabrics revenue this year 4.
Arista doubled quarterly revenue in ten quarters
Data
| Revenue | |
|---|---|
| Q1 '24 | $1.57B |
| Q2 '24 | $1.69B |
| Q3 '24 | $1.81B |
| Q4 '24 | $1.93B |
| Q1 '25 | $2.01B |
| Q2 '25 | $2.21B |
| Q3 '25 | $2.31B |
| Q4 '25 | $2.49B |
| Q1 '26 | $2.71B |
| Q2 '26 | $3.04B |
Cross-examination: margin is the tell
The complication sits in the margin line. Gross margin slipped to 63.4% in Q2 from 65.6% a year earlier, and CEO Jayshree Ullal said price increases will help only towards the end of the year or more like next year 4.
To lock supply through a component shortage management expects to run until 2028, purchase commitments reached $9.7 billion 43. The market is not forgiving the cost of admission: the stock fell 8.51% on October 30 against a 5.97% sector decline, and it trades near 45x forward fiscal 2026 earnings, 18 to 20% below its October high of $217.41 3. Last quarter a beat still cost shareholders 13.61% 4.
Verdict watch: Tuesday, November 3, after the close
Consensus wants $3.33 billion in revenue and $1.08 of EPS, roughly 44% growth 64. The numbers that decide the argument are margin and the AI revenue Arista says it keeps: front-end fabric and non-Nvidia back-end is merchant share, volume riding Nvidia racks is an echo. About $196,000 of call premium went in ahead of the print per one options-flow tracker 7, against a tape already battered by Alphabet−0.82% — Alphabet, down 0.82 percent today, Amazon−1.20% — Amazon, down 1.20 percent today and Intel−29.36% — Intel, down 29.36 percent today 8. Buying the rack buys the switch. Tuesday shows what is left to buy.
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