Arista Networks vs. Figma: Which Technology Stock Is a Better Buy in 2026?

Choosing between infrastructure and software can be a challenge for growth investors. Both Arista Networks Inc. (NYSE:ANET) and Figma Inc. (NYSE:FIG) offer compelling opportunities, but which is the better buy today?

Arista Networks provides the hardware and software necessary to power the world's largest data centers, while Figma offers a cloud-based design platform used by millions of developers. As both companies lean into the expansion of artificial intelligence, investors are weighing Arista's established profitability against Figma's rapid top-line growth.

The case for Arista Networks Inc.

Arista Networks provides data-driven networking platforms for massive data centers and campus environments among tech stocks. It serves "cloud titans" and specialty AI providers that require high-speed switching and routing capabilities. While the company does not name specific clients, its reliance on a limited number of large buyers creates significant customer concentration. Customer concentration like this adds a layer of risk to the business.

In FY 2025, revenue reached about $9.0 billion, representing growth of approximately 28.6% over the previous year. The company reported net income of around $3.5 billion for the period. This net margin, which is the percentage of revenue remaining after all expenses are paid, sat at roughly 39%.

As of its December 2025 balance sheet, Arista Networks reported a debt-to-equity ratio of 0.0x. This ratio, which compares total debt to shareholder equity, shows the company carries no debt. Its current ratio, a measure of the ability to pay short-term obligations using current assets, is approximately 3.0x. Free cash flow for FY 2025 was about $4.3 billion, calculated as cash from operations minus capital expenditures.

The case for Figma Inc.

Figma operates a collaborative design and product development platform used by teams to build digital products. The company generates most of its revenue through per-seat subscriptions, though it is transitioning toward usage-based models for its AI features. This shift includes introducing AI credits and pay-as-you-go plans to manage the costs of generative tools.

In FY 2025, revenue reached about $1.1 billion, which is a growth of roughly 41% compared to the prior year. Despite this growth, the company reported a net loss of around $1.3 billion for the period. This resulted in a negative net margin, which represents the loss as a percentage of total revenue, of approximately 118%.

As of its December 2025 balance sheet, Figma had a debt-to-equity ratio of nearly 0.1x. This means total debt is a small fraction of shareholder equity. The current ratio is approximately 2.6x, which measures a firm's liquidity using its current assets and liabilities. Free cash flow was roughly $246.2 million for FY 2025, representing cash from operations minus capital expenditures. Note that stock-based compensation represented roughly 544.2% of operating cash flow, meaning reported cash generation is heavily inflated by this non-cash add-back.

Risk profile comparison

Arista Networks faces risks from its reliance on Broadcom Inc. (NASDAQ:AVGO) for essential merchant silicon switching chips. Any supply shortages or failures in this collaboration could harm operations significantly. Furthermore, escalating international trade tensions and U.S. export controls create uncertainty regarding procurement and sales in foreign markets. The company must also compete in a rapidly evolving market for AI-focused networking equipment.

Figma relies entirely on Amazon.com Inc. (NASDAQ:AMZN) for its hosting infrastructure through AWS. Any service interruptions or price hikes from its provider could disrupt business or hurt profitability. The company also faces an evolving regulatory landscape, such as the European Union AI Act, which could impose high compliance costs. Additionally, Figma has a limited operating history at its current scale, making future growth projections uncertain.

Valuation comparison

Figma offers a lower entry point based on sales, while Arista Networks provides a more established valuation based on future earnings estimates.

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

Which stock would I buy in 2026?

Figma has seen its user experience design solution become the industry standard for digital asset and mobile application development. The company uses this niche dominance to introduce additional modules, helping transform it from a single-point solution into a full design platform.

One differentiator from competitors is that Figma has done an excellent job not only presenting itself to developers, but to marketers and product managers who have to collaborate on designs. That gives the company more champions in an organization for its products.

For the current fiscal year, revenue should grow quickly, at about a 39% rate, to $1.47 billion. Look for a dramatic slashing of its net loss, from nearly $1.3 billion to about $560 million. Wall Street still sees similarly sized losses ahead for the foreseeable future, however.

Arista Networks, meanwhile, is experiencing strong demand for its Ethernet solutions as AI drives growth in cloud networking. Cloud titans increased their spending by 30% in 2025 after a 30% increase in 2024. Arista is a big beneficiary of their spending and should continue to be. In addition to double-digit revenue growth for Arista from cloud titans, the company is seeing strong momentum in the campus and mainstream switching and routing markets, as it introduces and updates a slew of its product offerings targeting those operations.

For fiscal 2026, revenue is expected to jump nearly 40% to $12.6 billion, with net income rising by a similar percentage to $4.9 billion.

While Arista comes at a higher price-to-sales ratio than Figma, it has a more affordable forward P/E ratio. Coupled with growing profitability, compared to losses for Figma, Arista Networks is the stock to buy in 2026.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Arista Networks, Broadcom, and Figma. The Motley Fool has a disclosure policy.