Back to top

Image: Shutterstock

Arista Networks highlighted as Zacks Bull and Yum! Brands Bear of the Day

Read MoreHide Full Article

For Immediate Release

Chicago, IL – September 16, 2026 – Zacks Equity Research shares Arista Networks, Inc. (ANET - Free Report) as the Bull of the Day and Yum! Brands, Inc. (YUM - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corporation (NVDA - Free Report) and Broadcom Inc (AVGO - Free Report)

Here is a synopsis of all five stocks:

Bull of the Day:

Arista Networks, Inc.  is a high-tech picks-and-shovels AI stock that more than doubled its revenue and earnings between 2022 and 2025.

The AI infrastructure company, which works directly with AI hyperscalers Microsoft and Meta and other big tech firms, is projected to follow up its impressive artificial intelligence-boosted expansion with 35%+ revenue and earnings growth in 2026 and another ~25% next year.

Arista’s earnings outlook surged again after it reported another strong beat and raise quarter in early August.

Its upbeat EPS revisions earn ANET a Zacks Rank #1 (Strong Buy) and extend an impressive streak of improving earnings estimates as it successfully rides the AI data center boom and other technology trends.

The back-end technology infrastructure company designs and builds tons of the critical, high-speed tech-based “plumbing” that massive AI data centers rely on. This means that investors don’t have to worry about picking the front-facing winners as OpenAI, Anthropic, Google, and tons of others duke it out in the AI arms race.

ANET’s balance sheet is fantastic, and it's churning out stellar free cash flow growth. Plus, the stock is finding technical support after pulling back from its early-August peaks, and its average Zacks price target implies 30% upside.

All in, Arista stock appears to be one of the better long-term buy-and-hold stocks in the broader AI infrastructure industry.

It is worth stressing that despite AI bubble fears, $750 billion in new AI capex initiatives were announced in August alone, adding to a pipeline that’s already measured in trillions of dollars over the next several years.

Is ANET the Best AI and Tech Stock to Buy Now and Hold Forever?

Arista is a client-to-cloud networking powerhouse for large AI, data center, campus, and routing environments. Its growing portfolio helps connect computers, servers, and beyond to ensure fast and reliable data transfer.

In layman’s terms, ANETdesigns and builds the critical, high-speed technological “plumbing” networks that massive cloud computing and AI data centers depend on. Put differently, Arista makes the networking gear that enables huge data centers to talk to themselves at extreme speed.

When Microsoft, Meta, and others train AI models, thousands of chips must pass data back and forth constantly. Arista’s switches and beyond are the highway or tech-based railways that those chips use.

Arista’s offerings like high-speed Ethernet switches and networking gear are vital behind-the-scenes cogs helping massive AI data centers perform at their absolute peak.

ANET’s CEO Jayshree Ullal explained the company’s role in the current tech supercycle succinctly in prepared Q2 remarks, noting that “Customers see networking as the central nervous system for infrastructure from the client to campus to data and AI centers.”

Microsoft and Meta are two of Arista’s largest clients, highlighting its best-in-class offerings and ability to compete against rivals such as Cisco.

The explosion of cloud computing, big data, and most recently and critically, AI, puts Arista in a position to continue expanding and thriving as these areas of technology drive the economy and Wall Street.

Goldman Sachs projects that total global AI capex will reach $7.6 trillion between 2026 and 2031, across compute, data centers, and power. The AI hyperscalers alone are projected to spend ~$800 billion in AI-related capex in 2026 and then ramp up again in 2027.

The Top-Rank AI Stock’s Strong Growth and Outlook

ANET is thriving amid the ongoing AI infrastructure boom. And it's poised for long-term success even as the technologies mature beyond their rapid growth phase.

The company is churning out stellar free cash flow growth that’s helping improve its balance sheet. Arista is sitting on $13.3 billion in cash and equivalents and $23.7 billion in total assets vs. near-zero debt and $8.9 billion in total liabilities. 

The company more than doubled its revenue between 2022 ($4.38 billion) and 2025 ($9.00 billion), after more than doubling its top line between 2016 and 2021.

The picks-and-shovels AI stock also more than doubled its GAAP earnings between 2022 and 2025, soaring from $1.07 a share to $2.75 per share last year.

Most recently, it beat our Q2 earnings estimate by 15% on August 4 and upped its outlook once again after reporting its “first $3 billion quarter,” boosted by the ongoing success of its Arista 2.0 platform strategy.

Arista's Q3 earnings estimate surged 19% after its Q2 release, with its FY26 EPS estimate up 11% and its FY27 outlook 14% higher.

ANET’s upward earnings revisions land the stock a Zacks Rank #1 (Strong Buy) and extend its run of upward EPS revisions. It has also beaten our EPS estimates for five years running.

Our detailed analyst report about Arista on Zacks.com highlights a concise bull case for why investors should buy the stock: “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 projected to grow its revenue by another 39% in FY26 (after 29% sales growth last year) and 26% in 2027 to reach $15.80 billion next year.

The networking infrastructure firm is projected to grow its adjusted EPS by 36% in 2026 and 24% next year to $4.99 per share. The chart above showcases that ANET is expected to expand its bottom line to over $6.00 per share in FY28.

Buy the AI Picks-and-Shovels Stock Now?

ANET soared ~3,500% over the past decade, crushing the Zacks Tech sector’s ~485% and the all of the Magnificent 7 tech stocks outside of Nvidia. The stock has ripped ~47% higher in 2026 to outclimb Tech’s 18% and leave two of its biggest clients, Microsoft and Meta, in the dust.

The AI stock has dropped around 9% from its August records, and its average Zacks price target implies 30% upside.

ANET found support at its 50-day moving average on Monday, September 14, and it trades at neutral RSI levels.

Valuation-wise, Wall Street has paid a significant premium for ANET for the past 10 years. Still, Arista trades at a 25% discount to its highs at 43.6X forward 12-month earnings and 50% below its peaks when factoring in its earnings growth outlook, with a PEG ratio of 1.9.

Bear of the Day:

Yum! Brands, Inc. is the restaurant giant behind KFC, Taco Bell, and Habit Burger & Grill.

Yum’s earnings outlook has trended lower over the last several years as it struggles against headwinds facing the entire fast food industry.

The company is trying to adapt, and it even sold one of its struggling, yet iconic brands, Pizza Hut, recently. Its recent wave of downward earnings revisions land the stock a Zacks Rank #5 (Strong Sell) right now.

Should Investors Stay Away from YUM Stock Right Now?

Yum! Brands is the parent company behind Taco Bell, KFC, and fast-casual concept Habit Burger.

The company and its subsidiaries franchise or operate more than 44,000 restaurants in 150 countries.

The company announced in the middle of June that it entered into “definitive agreements to sell Pizza Hut for $2.7 billion in the aggregate, 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).” 

Yum is struggling against an array of headwinds battering its standing on Wall Street and with some customers.

The owner of KFC and beyond is trying to navigate inflation that’s hitting lower-income customers, as well as the negative impact of changing eating habits and the rise of GLP-1 diets.

Yum is still projected to grow its revenue and earnings at solid rates in 2026 and 2027.

But its downward earnings revisions land it a Zacks Rank #5 (Strong Sell) right now. They are also part of a long-term trend of negative earnings revisions.

The fast-food giant has climbed only 10% in the past five years, while the S&P 500 jumped ~75%.

Plus, YUM’s Retail – Restaurants industry sits in the bottom 34% of ~250 Zacks industries. All in, it might be best for investors looking to buy stocks right now to look elsewhere until Yum proves it’s ready to turn things around.

Additional content:

NVIDIA vs. Broadcom: Which AI Stock Should You Buy After Earnings?

NVIDIA Corporation and Broadcom Inc  both have capitalized on the robust artificial intelligence (AI) spending, with their latest quarterly results highlighting strong performance across key AI-related businesses. This raises an important question: which among the two is a better buy now for investors? Let’s have a look –   

NVDA’s AI Growth Momentum Remains Strong as Demand Soars

According to NVIDIA’s Aug. 26 press release, the company’s fiscal second-quarter 2027 revenues reached $96.2 billion, up 106% year over year and 18% quarter over quarter. The Data Center business remained the key growth driver, generating $89 billion in revenues, up 117% year over year and 18% sequentially. 

Alongside rapid top-line growth, NVIDIA delivered strong profitability. The company’s non-GAAP gross margin came in at 75%, up from 72.5% a year ago. Notably, continued high operating income helped the company translate its revenue gains into faster earnings growth.  

NVIDIA’s growth momentum is expected to continue in the next quarter as well. The company expects revenues of around $108 billion, plus or minus 2%, in the fiscal third quarter of 2027, up 12% sequentially from the midpoint. NVIDIA, in reality, is well-positioned to gain from the next wave of AI investment as its cutting-edge Vera Rubin platform is already in full production 

Solid Chip and Networking Demand Drives AVGO’s AI Business

Broadcom reported $29.6 billion in revenues for the fiscal third quarter of 2026, up 86% year over year, according to the company’s Sept. 2 press release. The key takeaway is that Broadcom’s AI semiconductor revenues reached $16.7 billion, up 221% year over year and 54% sequentially. 

Broadcom continues to benefit from the AI boom through custom chips and high-speed networking solutions. Ongoing AI spending is helping Broadcom’s business gain momentum quarter over quarter. The company now expects AI semiconductor revenues to accelerate to $21.7 billion in the fiscal fourth quarter of 2026, increasing 236% year over year. Consolidated revenue guidance for the fiscal fourth quarter stands at $34.8 billion, up 93% year over year. 

Along with rapid revenue growth, Broadcom’s profitability remains a major strength. Broadcom’s non-GAAP operating income rose 92% year over year to $20.1 billion in the fiscal third quarter, while free cash flow climbed 95% to $13.7 billion, giving the company strong financial flexibility to invest in research and development as well as growth. 

NVIDIA or Broadcom: The Better AI Stock to Buy Post Earnings

The latest quarterly results show that NVIDIA is witnessing strong AI-driven growth led by Data Center demand. Broadcom, on the other hand, is benefiting from an increase in demand for its custom AI chips and networking solutions. 

However, NVIDIA has a broader competitive moat that extends beyond its chips. While Broadcom’s AI opportunity is mostly centered on custom accelerators and networking, NVIDIA has created a powerful ecosystem by combining graphics processing units, CUDA, networking and AI software.  

NVIDIA also benefits from a more diversified customer base than Broadcom’s handful of custom-accelerator businesses. Moreover, NVIDIA has demonstrated enormous scale while maintaining strong growth and profitability. 

Lastly, NVIDIA’s 63.7% net profit margin, compared with Broadcom’s 42.9%, indicates NVIDIA’s greater efficiency in converting revenues into bottom-line profits. 

Therefore, NVIDIA appears to be the better buy than Broadcom, thanks to its stronger AI ecosystem, broader customer base, scale and stronger profitability. Additionally, NVIDIA appears more attractively valued than Broadcom. Per the price-to-earnings ratio, NVDA trades at 22.85 forward earnings compared with AVGO’s 29.24 forward earnings multiple.??????

NVIDIA currently has a Zacks Rank #1 (Strong Buy), while Broadcom has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.???

Why Haven't You Looked at Zacks' Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.

Today you can access their live picks without cost or obligation.

See Stocks Free >>

Free: Instant Access to Zacks' Market-Crushing Strategies

Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.

Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.

Get all the details here >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

https://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Published in