ANET's AI Networking Prowess: Can Momentum Sustain as the Market Shifts to 1.6G Infrastructure?

Arista Networks, Inc. ANET has established a commanding position in the rapidly expanding AI networking segment, where infrastructure demands are fundamentally reshaping data center architecture. The company’s technical foundation rests on Etherlink-based platforms that integrate zero-touch automation, encryption security, traffic steering and real-time analytics into a unified control interface. This comprehensive approach addresses the operational complexity enterprises face when scaling AI workloads.

The Ecosystem Play: Building Beyond NVIDIA

While Arista’s strategic partnership with NVIDIA represents a cornerstone—combining Arista’s switching excellence with NVIDIA’s GPU dominance to create synchronized AI infrastructure—the company is deliberately avoiding vendor lock-in. The ecosystem encompasses multiple technology vendors including AMD, Anthropic, Arm, Broadcom, OpenAI, Pure Storage and VAST Data. This openness reflects a market reality: no single vendor can monopolize the AI data center transition.

The infrastructure wave itself is accelerating dramatically. Data center networking standards have progressed from 400G to 800G, with industry experts anticipating the shift toward 1.6G networking architecture. This generational upgrade cycle is fueled by exponential growth in model training and inference operations. According to Precedence Research, the global AI in networks market is projected to expand from $15.28 billion in 2025 to $192.42 billion by 2034—representing a compound annual growth rate of 32.51%.

Financial Guidance and Growth Trajectory

Arista’s internal forecasts demonstrate confidence in this secular trend. The company has reaffirmed revenue guidance of $1.5 billion from AI operations in 2025, escalating to $2.75 billion in 2026. This growth trajectory reflects strong adoption momentum among hyperscale cloud operators, emerging neocloud providers and large enterprise campus networks.

From an earnings perspective, Wall Street has incrementally raised confidence in the company’s trajectory. Over the past 60 days, 2025 earnings estimates climbed 3.23% to $2.88 per share, while 2026 estimates increased 3.44% to $3.31.

How ANET Stacks Against Competitors

Arista operates in a competitive market where Hewlett Packard Enterprise HPE and Cisco Systems CSCO are actively pursuing AI networking opportunities. Cisco has leveraged its extensive partner ecosystem to gain traction. The company developed Cisco Secure AI Factory in collaboration with NVIDIA, built upon the NVIDIA Spectrum-X Ethernet platform. During its fiscal Q3, Cisco reported double-digit year-over-year expansion in data center switching orders.

HPE’s competitive position strengthened following the Juniper acquisition, which brought deep AI networking expertise. In fiscal Q4, HPE’s networking division achieved a remarkable 150% year-over-year increase in net sales. The company has recently integrated new AIOps functionality and harmonized hardware interfaces across Aruba and Juniper to enable autonomous network operations.

Valuation and Market Assessment

Arista shares have appreciated 8% over the trailing 12 months versus 0.8% growth for the broader networking equipment industry. However, the valuation reflects this outperformance: Arista trades at a forward price-to-sales multiple of 14.88, significantly above the industry median of 4.75.

Currently, Arista carries a Zacks Rank of #3 (Hold), suggesting the market views the stock as fairly valued relative to near-term growth catalysts.