Barclays IT Hardware and Communications Equipment: Campus Networking Model Update; Growth Normalizing
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Barclays has updated its campus networking model, concluding that market growth is normalizing following a robust expansion phase driven by post-pandemic restocking and digital transformation. The firm revised its 2026 growth forecast for the campus switch market down to 0% from a prior estimate of 5%, while projecting a mild recovery to 3% growth in 2027. The wireless LAN segment is expected to contract by 2% in 2026 before returning to 2% growth in 2027. The slowdown largely reflects a soft enterprise IT spending environment, where clients are digesting previous purchases, and an artificial intelligence-driven upgrade cycle has yet to meaningfully accelerate campus demand.
Despite the stagnant market backdrop, competitive positioning is shifting distinctly. Arista Networks continues to capture campus market share, with its campus revenue projected to grow 20% in 2026, although Barclays acknowledges notable downside risks. The firm maintains an Overweight rating on Arista with a target price of $120. Conversely, Cisco faces gradual share erosion, with its campus switch market share dropping from 55% in 2023 to 50% in 2025, and is expected to fall further to 48% in 2026. Barclays maintains a Neutral rating on Cisco with a $60 target. Regarding Hewlett Packard Enterprise, the ongoing integration of Juniper is expected to suppress 2026 campus revenue by 5%, with a projected rebound to 5% growth in 2027.
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