BofA: Switching Trends
Data Center (DC) Switching (66% of Market)Data center switching remains the largest segment and grew 50% YoY in 1Q26, driven heavily by cloud deployments: > AI Back-End Switching: Grew 121% YoY, now accounting for ~38% of the DC switching market compared to 26% a year ago. > Front-End Switching: Grew 25.6% YoY, accelerating from 11.8% growth in 1Q25. > Vendor Standings: In the aggregate DC market, Arista leads with a 21.1% market share, followed by Cisco at 17.8% and Celestica at 13.2%. Key Vendor & Customer Segment Shifts> Cisco’s AI Back-End Breakthrough: Cisco expanded its AI back-end DC switching market share from zero last year to 7.9% in 1Q26. Specifically within the Hyperscaler back-end segment, Cisco jumped to 13.2% (matching Arista and Nvidia), largely due to penetration into Meta's 800G leaf switch layer. > AI Back-End Leaders: White-box manufacturer Celestica remains the largest player in AI back-end switching with a 26.3% share, followed by Nvidia at 24.5% and Arista at 12.1%. > Nvidia Dominates Tier-2 AI: Nvidia commands a massive 57.2% share of the Tier-2/Neo Cloud AI back-end market, demonstrating a strong full reference design value proposition. > Arista's Tier-2 Front-End Strength: Arista holds 32.0% of the Tier-2 Front-End market, closely chased by Cisco at 21.6%.Campus Switching (34% of Market)> Steady Improvement: The segment grew 15.1% YoY in 1Q26, consistently tracking at a 9%+ growth baseline compared to historical averages of 1–2%. Growth is primarily driven by enterprise product refreshes. > Cisco Dominance: Cisco heavily leads the Campus market with a 53.5% share. Analysts expect Cisco to gain further share over the coming quarters as its Catalyst 4000 series (2026) and Catalyst 6000 series (late 2027) reach End-of-Service (EOS), triggering mandatory client refreshes.$Cisco(CSCO.US) $NVIDIA(NVDA.US) $Arista Networks(ANET.US) $Celestica(CLS.US)E
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