Shares of networking equipment maker Arista Networks were down nearly 14% on Tuesday afternoon, despite beating first-quarter financial expectations and issuing positive guidance for the second quarter.

Arista's stock was down below $148 a share and remained down by double-digit percentages during the company's conference call with analysts, after closing down 1.4% at $170.22 in regular trading. The stock is up nearly 30% through Tuesday's close and up more than 87% over the past 12 months.

For the first quarter ended March 31, Arista reported revenue of $2.7 billion, up 35.1% from the previous year's first quarter. Adjusted earnings of 87 cents a share compared with 66 cents a share the previous year.

For the current second quarter, Arista expects revenue of $2.8 billion, and earnings of about 88 cents a share. Analysts surveyed by FactSet are projecting second-quarter revenue of $2.78 billion, and earnings of 86 cents a share.

Investors may have been responding to Arista's projections for adjusted operating margin of 46% to 47% in the second quarter, which would be down from 48.8% in last year's second quarter, and below the 47.8% in the first quarter.

"Arista is off to a strong start in Q1 2026, with both our results and our industry-leading net promoter score," Chairperson and CEO Jayshree Ullal said. "We are uniquely positioned to deliver the mission-critical confluence of secure client-to-campus-to-cloud and AI networking."

On April 22, analysts at Evercore ISI wrote that Arista was poised to benefit from Google's new Virgo Network, the networking system that underpins its AI hypercomputer and unveiled in a blog post that day. They said that Alphabet's Virgo's architecture "maps directly to Arista's core product positioning in high-radix, high-bandwidth AI switching."

Arista said its first-quarter highlights included XPO high-density liquid-cooled pluggable optics for next-generation artificial intelligence data centers. "XPO reduces networking racks by up to 75% and saves up to 44% of floor space compared to traditional pluggable optics, enabling shorter cable runs and lower-power AI scale-up interconnect technologies," Arista said.

It also introduced a "universal AI spine" powered by the 7800 that it said would "deliver massive scale, predictable performance, and high-speed interface support."

Arista's latest Net Promoter Score of 89 indicates that 94% of customers are strongly positive about the company.