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Arista Networks (ANET) Stock

Arista Networks Stock Details, Movements and Public Alerts

Arista Networks Inc. (ANET): The $100 Billion Cloud Networking Powerhouse Riding the AI Infrastructure Wave

When Jayshree Ullal left Cisco to become Arista Networks' CEO in 2008, the startup was an unproven challenger attacking the networking giant's data center stronghold. Seventeen years later, Ullal has built Arista into a $100+ billion juggernaut that dominates cloud networking with customers like Microsoft, Meta, and Oracle relying on Arista's 7000/7500 Series switches and CloudVision management platform for their massive data centers. The AI boom has supercharged Arista's growth: training GPT-4-scale models requires tens of thousands of GPUs connected via 400Gbps and 800Gbps Ethernet—exactly Arista's specialty. With revenue growing 20%+ annually and operating margins near 40%, Arista trades at a forward P/E of 43.29 that reflects both premium quality and AI infrastructure tailwinds that could last a decade.

52-Week Range

$164.94 - $59.43

-28.81% from high · +97.58% from low

Avg Daily Volume

9,508,877

20-day average

100-day avg: 9,019,042

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

49.54

Above market average

Forward P/E

40.82

Earnings expected to grow

PEG Ratio

2.01

Potentially overvalued

Price to Book

14.28

EV/EBITDA

43.35

EPS (TTM)

$2.63

Price to Sales

19.42

Beta

1.39

Similar volatility to market

How is ANET valued relative to its earnings and growth?
Arista Networks trades at a P/E ratio of 49.54, which is above the market average of approximately 20. This premium valuation suggests investors expect above-average growth or the company has competitive advantages justifying the higher multiple. Looking ahead, the forward P/E of 40.82 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 2.01 indicates a premium valuation even accounting for growth.
What is ANET's risk profile compared to the market?
With a beta of 1.39, Arista Networks is roughly as volatile as the market, moving in line with broad market trends. This moderate beta suggests the stock offers market-level returns without excessive volatility. The price-to-book ratio of 14.28 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Performance & Growth

Profit Margin

39.70%

Operating Margin

42.40%

EBITDA

$3.67B

Return on Equity

31.70%

Return on Assets

14.70%

Revenue Growth (YoY)

27.50%

Earnings Growth (YoY)

15.50%

How profitable and efficient is ANET's business model?
Arista Networks achieves a profit margin of 39.70%, meaning it retains $39.70 from every $100 in revenue after all expenses. This is an impressive margin, indicating strong pricing power and efficient cost management that allows the company to generate substantial profits. The operating margin of 42.40% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 31.70% and ROA at 14.70%, the company generates strong returns on invested capital.
What are ANET's recent growth trends?
Arista Networks's revenue grew by 27.50% year-over-year, representing robust expansion that significantly outpaces typical market growth rates. This strong top-line performance suggests the company is successfully capturing market share or benefiting from favorable industry trends. Earnings increased by 15.50% year-over-year, reflecting the bottom-line impact of business performance. These growth metrics should be evaluated against COMPUTER HARDWARE industry averages for proper context.

Company Size & Market

Market Cap

$164.1B

Revenue (TTM)

$8.45B

Revenue/Share (TTM)

$6.71

Shares Outstanding

1.26B

Book Value/Share

$9.46

Asset Type

Common Stock

What is ANET's market capitalization and position?
Arista Networks has a market capitalization of $164.1B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 1.26B shares outstanding, the company's ownership is widely distributed. As a major player in the COMPUTER HARDWARE industry, it competes with other firms in this sector.
How does ANET's price compare to its book value?
Arista Networks's book value per share is $9.46, while the current stock price is $117.42, resulting in a price-to-book (P/B) ratio of 12.41. This high P/B ratio indicates significant intangible assets, strong brand value, or high growth expectations. Technology and consumer brand companies often trade at elevated P/B ratios due to intellectual property and competitive advantages not reflected on the balance sheet. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$163.87

39.56% upside potential

Analyst Recommendations

Strong Buy

5

Buy

18

Hold

4

Sell

0

Strong Sell

1

How reliable are analyst predictions for ANET?
28 analysts cover ANET with 82% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The strong bullish consensus may already be priced in. The consensus target of $163.87 implies 39.6% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on ANET?
Current analyst recommendations:5 Strong Buy, 18 Buy, 4 Hold, 01 Strong Sell. The bullish tilt suggests optimism about future prospects, though investors should conduct independent research.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Nov 15, 2025, 02:04 AM

Technical Indicators

RSI (14-day)

26.85

Oversold

50-Day Moving Average

$143.90

-18.40% below MA-50

200-Day Moving Average

$111.85

4.98% above MA-200

MACD Line

-7.24

MACD Signal

-4.72

MACD Histogram

-2.53

Bearish

What does ANET's RSI value tell investors?
The RSI (Relative Strength Index) for ANET is currently 26.85, indicating the stock is in oversold territory (below 30). This indicates heavy selling pressure that may have pushed the price too low too fast. Oversold readings can present buying opportunities, but stocks can remain oversold in strong downtrends. Look for RSI to rise above 30 as a potential recovery signal. Combined with the price being below the 50-day moving average, this confirms bearish conditions.
How should traders interpret ANET's MACD and moving average crossovers?
MACD analysis shows the MACD line at -7.24 below the signal line at -4.72, with histogram at -2.53. This bearish crossover indicates downward pressure. The wide histogram confirms strong momentum. The 50-day MA ($143.90) is above the 200-day MA ($111.85), forming a golden cross pattern that typically signals a long-term uptrend. Price is currently between the MAs, suggesting transition.

Indicators last updated: Nov 22, 2025, 12:46 AM

Active Alerts

Alert Condition
Forward P/E falls below
Threshold
38 x
Created
Nov 17, 2025, 04:34 PM
Alert Condition
RSI Threshold Cross
Threshold
30
Created
Nov 14, 2025, 04:39 PM
Alert Condition
RSI Threshold Cross
Threshold
30
Created
Nov 14, 2025, 04:33 PM
Alert Condition
Forward P/E falls below
Threshold
40 x
Created
Nov 12, 2025, 10:05 PM
Alert Condition
Price decreases by
Threshold
3%
Created
Oct 26, 2025, 06:58 PM
Alert Condition
Forward P/E falls below
Threshold
40 x
Created
Oct 17, 2025, 12:46 PM

Arista Networks Inc. (ANET) Stock Analysis 2025: Complete Investment Guide

The Cloud Networking Disruptor That Dethroned Cisco

Arista Networks was founded in 2004 by Andy Bechtolsheim (Sun Microsystems co-founder) and David Cheriton (Stanford professor) to challenge Cisco's data center networking monopoly. The insight was simple but powerful: cloud providers needed fundamentally different networking gear than traditional enterprises. Jayshree Ullal, a 15-year Cisco veteran who ran its $10 billion data center business, joined as CEO in 2008 and executed a flawless strategy: target hyperscale cloud providers with software-defined networking that offered superior performance, lower costs, and radical simplicity compared to Cisco's bloated product lines.

By 2025, Arista owns 40%+ of the cloud data center switching market, with Microsoft Azure, Meta, Oracle, and other hyperscalers standardizing on Arista's 7000 and 7500 Series switches running the company's proprietary EOS (Extensible Operating System). The AI boom has created a second growth wave: training large language models like GPT-4 or Google's Gemini requires connecting tens of thousands of GPUs via ultra-high-speed networks. Arista's 400Gbps and emerging 800Gbps Ethernet switches are purpose-built for these AI clusters, positioning the company as critical infrastructure for the AI era. Ullal's vision—software-defined networking at hyperscale—has proven prescient.

Business Model & Competitive Moat

Arista sells high-performance Ethernet switches and routers, but the real differentiation lies in EOS—a Linux-based network operating system that runs on all Arista hardware. Unlike Cisco's proprietary IOS, EOS is open, programmable, and designed for automation at cloud scale. CloudVision, Arista's network management platform, provides unified visibility and control across entire data center fabrics, enabling hyperscalers to operate networks with minimal human intervention. This software-centric approach generates recurring software subscription revenue (15-20% of total) while creating sticky customer relationships.

Arista's moat rests on three pillars: technical superiority (EOS delivers lower latency and higher throughput than Cisco IOS in cloud environments), deep hyperscaler integration (Arista engineers work inside Microsoft and Meta data centers, co-designing network architectures), and switching costs (migrating from Arista to competitors requires retraining engineers and reconfiguring thousands of switches). Ullal's relentless focus on innovation—Arista was first to market with 400Gbps switches—keeps the company ahead of rivals. Operating margins near 40% reflect the power of this model: once EOS is developed, incremental switch sales carry high margins.

Financial Performance

Arista delivered $6.8 billion in revenue in 2024, up 20%+ year-over-year, with operating income exceeding $2.7 billion. The company's financial profile resembles a software business more than traditional hardware: gross margins near 65%, operating margins above 40%, and free cash flow conversion exceeding 100%.

  • •Revenue Growth: 20-25% annually, driven by cloud data center expansion and AI infrastructure buildouts
  • •Gross Margins: 63-65%, reflecting premium pricing for differentiated technology and software subscriptions
  • •Operating Margins: 40-42%, 2x higher than Cisco (20%) due to software-centric business model
  • •Free Cash Flow: $2.5B+ annually, with 100%+ FCF conversion enabling aggressive R&D and buybacks
  • •Balance Sheet: Net cash position of $6B+, providing financial flexibility for M&A and innovation

Growth Catalysts

  • •AI Infrastructure Boom: Training frontier AI models requires 400Gbps/800Gbps Ethernet for GPU interconnects—Arista's specialty—with TAM expanding from $5B to $15B+ by 2027.
  • •Cloud Data Center Expansion: Hyperscalers continue building capacity to support cloud workloads, with Arista capturing 40%+ of incremental switching spend.
  • •Enterprise Adoption: Campus and enterprise data centers adopting cloud-native networking, expanding TAM beyond hyperscalers to Fortune 500 companies.
  • •800Gbps Ethernet Transition: Next-gen switches launching in 2025-2026 enable technology refresh cycle, boosting ASPs and revenue per customer.
  • •Software Subscriptions: CloudVision and analytics platforms driving recurring revenue growth at 30%+ annually, improving revenue predictability.

Risks & Challenges

  • •Customer Concentration: Top 5 customers account for 50%+ of revenue; if Microsoft or Meta slow capex, Arista's growth could stall abruptly.
  • •Cisco Competition: Cisco is aggressively targeting cloud networking with new silicon and software, leveraging its massive sales force and customer relationships.
  • •Valuation Risk: Forward P/E of 43.29x leaves little room for error; any revenue miss could trigger sharp multiple compression.
  • •AI Capex Cyclicality: AI infrastructure spending could prove cyclical if ROI on AI investments disappoints, reducing demand for high-speed networking.
  • •Talent Retention: Jayshree Ullal is 64; succession planning and retention of engineering talent critical to sustaining innovation edge.

Competitive Landscape

Arista's primary competitor is Cisco, which still dominates enterprise networking but has struggled in cloud data centers. Cisco's attempt to compete with its Nexus 9000 series has gained limited traction among hyperscalers, as customers cite superior Arista performance and simpler management. Juniper Networks (acquired by HPE in 2024) and Dell/Broadcom offer alternatives, but lack Arista's cloud-native DNA. Emerging threats include Nvidia's Spectrum-X Ethernet platform optimized for AI, though Arista's partnership with Broadcom for custom silicon provides a hedge.

Jayshree Ullal's strategic advantage lies in focus: while Cisco spreads resources across enterprise, security, collaboration, and cloud, Arista concentrates exclusively on data center networking. This laser focus enables faster innovation cycles—Arista shipped 400Gbps switches two years before Cisco. Customer intimacy also differentiates: Arista engineers embed inside hyperscaler data centers, co-developing architectures that competitors can't easily replicate. With 40%+ market share among cloud providers and expanding enterprise presence, Arista's competitive position has never been stronger.

Who Is This Stock Suitable For?

Perfect For

  • ✓Growth investors seeking exposure to AI infrastructure buildout (5-10 year theme)
  • ✓Quality-focused investors wanting best-in-class margins (40%+) and cash generation
  • ✓Long-term technology investors (7+ years) betting on cloud data center expansion
  • ✓Momentum investors comfortable with volatility (stock moves 20-30% on earnings)
  • ✓Investors seeking Cisco alternative with superior cloud networking exposure

Less Suitable For

  • ✗Value investors uncomfortable with 43x forward P/E (3x premium to S&P 500)
  • ✗Income investors (no dividend; company prioritizes R&D and buybacks)
  • ✗Risk-averse investors worried about customer concentration (top 5 = 50%+ revenue)
  • ✗Short-term traders (quarterly results swing on lumpy hyperscaler capex cycles)

Investment Thesis

Arista Networks offers a pure-play investment in two unstoppable secular trends: cloud data center expansion and AI infrastructure deployment. The company's 40%+ market share among hyperscalers, combined with 40% operating margins, creates a compounding machine that few technology companies can match. Jayshree Ullal's 17-year track record—dethroning Cisco in cloud networking—demonstrates execution capability that justifies premium valuation. The AI boom provides a second growth wave: every GPU cluster for training frontier models requires Arista's ultra-high-speed Ethernet, expanding TAM from $5 billion to $15 billion+ by 2027.

The forward P/E of 43.29 reflects both quality (best margins in networking) and growth (20%+ revenue CAGR). Customer concentration risk is real—Microsoft and Meta drive significant revenue—but these relationships are deeply entrenched and expanding. Cisco remains a threat, but its enterprise DNA and bloated product portfolio limit cloud competitiveness. For investors with 5+ year horizons willing to endure volatility, Arista represents a rare combination: dominant market position, fortress-like profitability, and exposure to AI infrastructure that could compound for a decade. The key risk isn't competition—it's valuation and customer spending cyclicality.

Conclusion

Conclusion

Arista earns a HOLD rating at current valuations, with BUY recommended on any pullback below $95. The combination of 40% margins, 20%+ growth, and AI tailwinds creates compelling long-term value, but the 43x forward P/E leaves limited margin of safety. Existing shareholders should hold through volatility, viewing the lack of dividend as reinvestment in R&D that sustains the moat. New investors should wait for a correction or dollar-cost average, as quarterly results can swing 20-30% on lumpy hyperscaler orders. Quality justifies premium pricing, but patience improves risk-reward.
Bull Case
$135 (25% upside) – AI infrastructure spending accelerates, 800Gbps adoption exceeds expectations, enterprise wins expand TAM
Base Case
$110 (2% upside) – Steady 20% revenue growth, margins hold at 40%, valuation remains at 40-45x forward earnings
Bear Case
$75 (30% downside) – Hyperscaler capex slowdown, Cisco regains share, AI spending proves cyclical

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