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Jim Cramer: What the Plunge in Arista Networks Says About Cisco

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The clouds just rolled in on Real Money Stock of the Day Arista Networks (ANET) - Get Arista Networks Inc. Report with the stock plummeting upwards of 27%.

Arista posted earnings of $2.69 a share on revenue of $654.4 million for the latest quarter. Analysts surveyed by FactSet had been looking for $2.41 a share, on sales of $653.3 million.

But earnings really weren't the problem. Arista lowered its guidance citing "sudden softening in Q4 with a certain cloud customer."

Arista Networks builds scalable, high-performance and ultra-low latency cloud networks and does business with both Facebook FB and Microsoft MSFT.

While Cramer said CEO Jayshree Ullal is a genius that built Arista from nothing, the company's "hiccup" with Facebook left analysts mystified. 

"When analysts are mystified, like they were with GrubHub  (GRUB) - Get Grubhub, Inc. Report earlier this week, that means sell," Cramer said.

In addition, Cramer added that the problems at Arista could be signaling problems at name Cisco (CSCO) - Get Cisco Systems Inc. Report as well. 

Catch his full take in the video above. 

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