Arista Networks Inc. (ANET) shares plummeted 14.48% during Wednesday's intraday trading session. The sharp decline followed the networking equipment maker's release of its first-quarter financial results.

The company reported revenue and adjusted earnings per share that exceeded analyst expectations. However, the adjusted gross margin of 62.4% fell short of the anticipated 62.7%, raising immediate concerns about profitability. Furthermore, Arista's projection for second-quarter adjusted operating margin of 46% to 47% was below the 48.8% achieved in the same period last year.

Analysts noted that despite the double beat on top and bottom lines, investors had elevated expectations after the stock's strong rally of nearly 30% year-to-date. The margin miss and softer margin outlook were insufficient to meet the high bar set by the market, triggering the significant selloff. The company's slightly higher Q2 revenue and EPS guidance also failed to satisfy investors who were anticipating a stronger forecast.