Arista Networks heads into its July 31 earnings report with the most bullish options positioning of the past year — even as insiders continue to trim.
The options signal is the sharpest change since the last article. The put/call ratio has dropped to 0.85, nearly two standard deviations below its 20-day average of 0.91 and the lowest reading in the past 52 weeks. That marks a decisive shift toward calls over puts — traders are paying more for upside exposure than at any point in the prior year. The stock pulled back 1.9% on Monday to $170.76, giving up some of its 8.4% monthly gain, but the options market is not treating that dip as a warning sign.
Short sellers have been exiting the stock aggressively into this setup. Short interest has fallen 17% over the past week and 21% over the past month, landing at just 1.4% of the free float — a genuinely low level. Borrow costs have eased in parallel, now running at just 0.26%, down 27% over the month. Availability remains extraordinarily loose, with over 9,200% of short interest covered by available shares — meaning there is essentially no friction for new shorts if sentiment shifts, but also no squeeze pressure acting on the price.
The Street remains broadly constructive heading into the print. Analysts have been raising targets almost unanimously over the past six weeks, with the consensus mean now at $192 against a current price of $170.76. Needham raised to $200 this week; TD Cowen moved to $210 earlier in the month. The bull case centres on Arista's dominance in AI-driven data centre networking, deepening ties with Microsoft and Meta, and a product cycle in high-speed Ethernet switching that peers struggle to match. Bears point to customer concentration — two accounts represent over 42% of revenue — intensifying competition from Cisco, and a valuation that prices in sustained perfection: the stock trades at roughly 42x trailing earnings and over 32x EV/EBITDA.
That tension between rich valuation and genuine growth momentum is what the July 31 print is directly going to test — and specifically whether Arista can sustain the hyperscaler capex narrative that has driven the stock up 29% year-to-date, even as its founder and CEO quietly reduce their own exposure at current levels.
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