What happened

Shares of Arista Networks (ANET -0.06%) rose 23.7% in July 2020, according to data from S&P Global Market Intelligence. The networking equipment maker didn't have much news to share in July, but analysts could smell an impressive second-quarter report coming up in early August.

So what

Several analyst firms posted bullish previews of Arista's second-quarter results in the second half of July, driving the stock steadily higher. When the second-quarter report finally arrived, it was a solid beat-and-raise effort that triggered an immediate 11% sell-off because the expectations had been set so incredibly high just before Arista's report.

Several miniature toy workers appear to be plugging an Ethernet cable into an open port on a router.

Image source: Getty Images.

Now what

All told, Arista's stock has now gained 6% since the end of June. That's roughly in line with the broader market. The company is facing higher component and shipping costs due to the COVID-19 crisis, but it's also positioned to benefit from rising investments in data center infrastructure -- also partly based on coronavirus effects. It's hard to tell where this stock will go next, and the shares look fairly valued today. I'm neither a buyer nor a seller of Arista shares right now.