Arista Networks, Inc. ANET and Jabil Inc. JBL are two leading players in the technology manufacturing industry. Arista offers one of the broadest product lines of data center and campus Ethernet switches and routers in the industry. It provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency.
Jabil is one of the largest global suppliers of electronics manufacturing services (EMS) solutions. The company offers electronics design, production, product management and after-market services to customers in the aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries.
With domain-specific expertise in core areas, both Arista and Jabil are strategically positioned in the tech-adjacent manufacturing landscape and have the means to cater to the evolving demands of business enterprises and artificial intelligence/machine learning (AI/ML) technology. Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.
The Case for ANET
Arista holds a leadership position in 100-gigabit Ethernet switches and is increasingly gaining market traction in 200- and 400-gigabit high-performance switching products. The Arista 2.0 strategy is resonating well with customers, as its modern networking platforms are foundational for the transformation from silos to data centers. The company boasts a comprehensive portfolio with the right network architecture for client-to-campus data center cloud and AI networking, backed by three guiding principles. These include best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms.
The Arista 2.0 strategy includes three components that are likely to drive growth over the next few years. The first component involves focused plans to invest in core businesses by rolling out new solutions and improved AI offerings. Secondly, Arista aims to emphasize more on software-as-a-service for improved revenue visibility. Last but not least, the company plans to enter adjacent markets to target a broader customer base.
Arista remains plagued by high operating costs. Total operating expenses in the first quarter of 2026 increased around 24.4% to $519 million, owing to a rise in headcount, new product introduction costs and higher variable compensation expenditures. Moreover, the redesigning of products and their supply chain mechanism has eroded margins. Although the company is witnessing increased demand, there are lingering supply bottlenecks for advanced products. Therefore, Arista is increasing orders for these components and trying to build up inventory, which is blocking working capital.
The Case for JBL
With a presence across 100 locations in 30 countries, Jabil is likely to gain from secular growth drivers with strong margins and cash flow dynamics. Its unmatched end-market experience, technical and design capabilities, manufacturing know-how, supply-chain insights and global product management expertise have put it in good stead.
Management’s focus on improving working capital management and integrating sophisticated AI and ML capabilities to enhance the efficiency of its internal processes is a major tailwind. Jabil’s top line is expected to benefit from strength in AI data center infrastructure, capital equipment and warehouse automation markets. The company is likely to gain from the rapid adoption of 5G wireless and cloud computing in the long run. It is benefiting from solid demand in key end markets, together with excellent operational execution and skillful management of supply-chain dynamics.
However, Jabil operates in a highly competitive environment, facing competition from both domestic and international electronic manufacturers, manufacturing service providers and designers like Sanmina Corporation SANM. The tense geopolitical situation between the United States and China, and the Iran war remain headwinds with shipping restrictions in the Strait of Hormuz. Against the backdrop of this global uncertainty, low demand in some consumer-centric markets is negatively impacting its margins.
How Do Estimates Compare for ANET & JBL?
The Zacks Consensus Estimate for Arista’s 2026 sales and EPS indicates year-over-year increase of 28.2% and 21.8%, respectively. The EPS estimates for ANET have increased 3.1% over the past 60 days.
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The Zacks Consensus Estimate for Jabil’s fiscal 2026 sales and EPS implies year-over-year growth of 14.1% and 26.1%, respectively. The EPS estimates have trended up 5.8% over the past 60 days.
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Price Performance & Valuation of ANET & JBL
Over the past year, Arista has surged 46.4% against the industry’s decline of 15.3%. Jabil has gained 113.9% over the same period.
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Jabil looks more attractive than Arista from a valuation standpoint. Going by the price/earnings ratio, JBL shares currently trade at 25.88 forward earnings, lower than 36.81 for ANET.
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ANET or JBL: Which is a Better Pick?
Both Arista and Jabil carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both Arista and Jabil expect sales and profits to improve in 2026, although the former’s growth expectations exceed those of the latter. Jabil boasts a better price performance, and its valuation metrics appear comparatively more attractive. Jabil offers a cheaper, more diversified way to participate in AI hardware demand with potentially lower downside risk. Consequently, JBL seems to be a better investment option at the moment.
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This article originally published on Zacks Investment Research (zacks.com).