Arista Networks is not immune to the growing memory chip supply constraints, with CEO Jayshree Ullal bluntly telling investors during the vendor’s latest earnings call that “we're having to smile and take it just about at any price we can get, and the prices are horrendous,” a situation that could eventually be passed on to Arista customers.

Ullal did couch those concerns by first stating Arista has been aware of the supply chain challenge since last year, “and frankly, absorbed a lot of the costs in 2025 that we were incurring.”

“However, in 2026, the situation has worsened significantly,” Ullal said, adding that memory chip prices are “orders of magnitude, exponentially higher. … With the situation worsening and also expected to last multiple years, we are experiencing shortages in memory. Thankfully … as you can see reflected in our purchase commitment, we are planning for this, and I know that memory is now the new gold for the AI and automotive sector. But clearly, it's not going to be easy, but it's going to favor those who planned and those who can spend the money for it.”

That planning and spending means that this pricing surge could soon be passed to Arista customers.

“I have been reviewing this, and we do believe there will be a one-time increase on selected, especially memory-intensive SKUs, to deal with it,” Ullal said. “We cannot absorb it if the prices keep going up the way they have in January and February.”

Arista had been viewed as a vendor that might be able to avoid the impact of the memory chip crunch due to its networking stack. However, that's turning out not to be the case.

Arista’s strategy echoes that of others in the space, including network heavyweight Cisco, which has implemented a trio of what CEO Chuck Robbins told investors during the vendor’s most recent earnings call were “key strategies” to mitigate the impact. These include already announced price increases, with plans to “monitor market trends and make additional adjustments as necessary.”

Cisco is also “revising contractual terms with channel partners and customers to address evolving component prices,” and is leaning on its overall scale to “negotiate favorable terms and secure supply to fulfill current and future demand.”

“Overall, we feel confident in our ability to manage this industry-wide dynamic better than our peers,” Robbins said.

Extreme Networks CEO Ed Meyercord said the vendor had also recently implemented a 7% price increase, and the results were “like a tree falling in the forest, a total non-issue,” a reaction Meyercord said showed the “price inelasticity of networking.”

“If you think about an organization, think about your organization, there's no discussion about whether or not you need a network and that you need a modern network with modern networking tools. This is true for all of our customers. It's kind of a non-negotiable,” Meyercord said during the earnings call. “I'd say our customers are very resilient from a pricing perspective.”

Meyercord furthered this notion to SDxCentral, stating that “even if we have small increases in our prices, customers will bear that because they need to. They need to support critical infrastructure.”

Arista could be expecting a similar non-issue, as despite the uncertainty it increased its full-year growth guidance by 25%, with new expectations of $11.25 billion in revenues compared to the $9 billion on 28.6% growth it reported for its 2025 fiscal year.

Capex flow through

Ullal also downplayed concerns over long-term vendor growth opportunities in light of the large capex numbers being thrown around by Arista’s bigger customers, noting, “We don't track the capex.” Ullal explained that these capex claims are initially targeted at the base data center builds, including site construction, power, and compute equipment, adding that “the network lags a little.”

Ullal also teed up that these capex numbers are tied to new, AI-connected products and use cases, “where customers are still in their first innings.”

Analysts noted that two of Arista’s largest “cloud titan” customers are Microsoft and Meta, which represent 42% of the vendor’s $9 billion in revenues last year. Arista’s management added that it expects one or two more new customers to account for more than 10% of revenues in 2026.