Arista Tumbled 12% But Portfolio Still Off to a Good Start

The first trading week of 2026 is over, and we are off to a good start with more than 60% of my counters moving in the right direction.

It’s way too early to draw any conclusions, but let me highlight some interesting early movers.

Accelerating Off the Blocks

The fastest off the block this year is Novo Nordisk (NASDAQ: NVO), up by already more than 15%!

This significant rally is primarily driven by the official commercial launch of the Wegovy pill, its oral GLP-1 treatment for obesity.

By offering it at a significantly lower price than most injectable GLP-1s, Novo may be able to recapture market share lost to “compounded” (off-brand) versions of the drug.

The “sweetener” is the positive ruling in China regarding the semaglutide patent, which allows Novo to launch its pill now, before generic local injections become available in March.

The jury is still out, but if Novo gets its execution of Wegovy pill right, you should see some positive impact on its sales in 2026.

Following close behind is Ulta Beauty (NASDAQ: ULTA) which is up by about 10%.

A major catalyst is the announcement that Selena Gomez’s Rare Beauty (previously a Sephora exclusive) will launch in over 1,500 Ulta stores nationwide starting February 1, 2026.

Beyond that, the stock benefited from positive reports and upgrades from multiple analysts (UBS, Argus, and Oppenheimer).

Hot on Ulta’s heels is Veeva Systems (NYSE: VEEV). The market cheered the announcement of its first-ever share buyback of US$2 billion (over two years), sending its share price up by nearly 8% over the past week.

On the local front, my fastest mover is UMS Integration (SGX: 558), up 5.6% thus far.

Its 1-for-4 bonus issue went XB on Friday.

While the price adjusted downward to account for the additional shares, the market’s resilient response (dropped 16% instead of the theoretical 20%) translated to a gain for shareholders who held through the date.

Off to a Crippling Start

This strong momentum was unfortunately dragged by a 12% tumble in Arista Networks (NASDAQ: ANET).

As one of my top five largest holdings, a double-digit drop in ANET has a meaningful impact on my overall portfolio. So, what caused this sudden reversal in a 2025 darling?

The primary culprit appears to be a “valuation reset” following 2026 guidance. Management signalled a moderation in growth to approximately 20%, which is a step down from the 27% we saw last year.

However, I am not overtly worried for several reasons.

Strong Fundamentals

Arista still boasts a fortress balance sheet with zero debt and a massive $3.5 billion backlog.

The demand isn’t disappearing; it’s simply being “pushed out” as physical infrastructure catches up to the massive chip supply.

The Nvidia “Threat”

The market has a recurring nightmare about Nvidia’s Spectrum-X Ethernet platform eating Arista’s lunch. While Nvidia is a formidable competitor, it’s important to remember they are also partners.

Together, they are expanding the Total Addressable Market (TAM) for AI networking so rapidly that there is ample room for both to thrive.

Long Growth Runway and Uneven Growth

We are in the “early innings” of the AI build-out. Unlike software, hardware growth is often lumpy and uneven. Even if growth “settles” at 20%, that is an exceptional pace for a company of this scale.

Act Less, Observe More

As mentioned in my year-end review , I am feeling more cautious after three years of double-digit returns.

Therefore, while I believe the steep drop in Arista is uncalled for and Novo could see further upside, I am not opening my wallet to increase my position in either my top or bottom holdings.

For now, I’m content to sit on my hands and watch the 2026 narrative unfold.

Disclaimer

This content is for informational only. I am not a financial advisor, tax professional, or legal expert, and the information shared here does not constitute personalised financial advice, nor is it a solicitation to buy or sell any securities or financial instruments.

All opinions and commentary reflect my personal views and are based on general market commentary.

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Always conduct your own research and due diligence and consult with a qualified, licensed financial professional, tax professional, or legal advisor before making any investment or financial decision.