Arista Networks (ANET): Assessing Valuation After New VESPA and AVA AI Networking Launches

Arista Networks (ANET) just unveiled a fresh wave of campus and industrial networking tech, headlined by its new VESPA architecture and upgraded AVA agentic AI, and investors are already weighing what this means for long term growth.

See our latest analysis for Arista Networks.

Those launches land after a volatile spell where cautious Q4 guidance knocked sentiment, yet Arista’s 20.22% year to date share price return and 25.74% one year total shareholder return still point to solid, building momentum behind the AI networking story.

If this AI driven networking push has your attention, it is a good moment to explore other potential beneficiaries via high growth tech and AI stocks and see what else is quietly gaining traction.

With earnings still outpacing expectations, a below peer P E multiple, and the stock trading roughly 22 percent below consensus targets, is Arista an AI infrastructure leader on sale, or is the market already discounting years of growth?

Most Popular Narrative Narrative: 18.1% Undervalued

With Arista Networks last closing at $134.39 versus a narrative fair value of about $164.08, this viewpoint argues the market is underestimating its AI networking runway.

The migration of AI networking from proprietary standards (InfiniBand, NVLink) to open Ethernet solutions is expanding Arista's addressable market, expected to drive sustained multi-year revenue growth as hyperscalers and enterprises favor open, scalable architectures for both back-end and front-end AI clusters.

Read the complete narrative.

Curious how this growth story relates to a richer future earnings multiple while still framing the stock as inexpensive? The narrative focuses on powerful revenue compounding, resilient margins, and bold long term profit expectations that may be surprising. Want to see the specific assumptions behind that view? Read on to review the full valuation playbook.

Result: Fair Value of $164.08 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upbeat view still faces risks from Arista’s concentration in a few hyperscaler customers, as well as intensifying competition that challenges its pricing power and margins.

Find out about the key risks to this Arista Networks narrative.

Another Angle on Valuation

While the narrative fair value frames Arista as 18.1 percent undervalued, a plain earnings multiple tells a tougher story. At about 50.4 times earnings versus a fair ratio near 39.1 times and a US Communications average of 33.7 times, the stock screens expensive. Is growth really strong enough to keep that premium intact?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Arista Networks Narrative

If you see things differently or simply enjoy digging into the numbers yourself, you can quickly craft a personalized perspective in just a few minutes: Do it your way.

A great starting point for your Arista Networks research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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