It's not nvidia or broadcom)

Key Points

• Arista Networks has emerged as the biggest choice for AI data center networking.

• The transition from its own InfiniBand and NVLINK to Ethernet is accelerating.

• By expanding to businesses and WAN markets, you can diversify your revenue streams.

• 10 stocks better than Arista Networks›

benchmark S&P 500 It recovered dramatically from a tariff-led shock in April 2025 and is currently trading near record highs. In particular, the “magnificent 7” stock has been an important driver of the last six months of meetings. The increasing adoption of artificial intelligence (AI) worldwide, coupled with strong revenue performance, has boosted investors' confidence in these tech giants.

The giant of semiconductors nvidia It continues to be the paragon of this ongoing AI boom. However, another company could soon become Wall Street beloved, as it helps GPUs work together efficiently on large AI clusters. That company is Arista Network (NYSE: anet).

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While most investors focus on AI chips, networking is just as important. AI training and inference (real-time deployment) workloads require a huge cluster of GPUs, each costing tens of thousands of dollars. However, without the fast, low latency connections between GPUs, both training of large AI models and large inference suffer from poor performance and increased costs. Arista is a good solution to these challenges.

AI Data Center Catalyst

Arista has established itself as a pure PlayEthernet networking company, providing hardware and software networking solutions for large AI data centers, as well as campus and routing networks.

Until recently, Ethernet was not considered powerful enough for AI workloads. Instead, Nvidia's Infiniband Technology was an option for scale-out-back-end AI networks that linked servers and accelerator racks in large GPU clusters. Even scale-up backend AI networks (in server racks) connect GPUs to high performance and low latency networking using NVIDIA's proprietary high-bandwidth interconnect technology NVLINK. But that seems to be changing now.

Ultra Ethernet Consortium (UEC) released its first full specification in June 2025, creating an Ethernet-based system at scale designed for AI and high performance computing (HPC). Since then, HyperSchoola and companies have moved from their own InfiniBand to open source Ethernet. Arista also expects clients to migrate from NVLink to Ethernet/Ualink networks on scale-up backend networks.

Arista pairs with an Ethernet-based EtherLink portfolio (more than 20 products launched since 2024) and an expandable operating system (EOS) operating system, which will dramatically benefit from this transition.

The company already accounted for nearly 21.3% of the data center Ethernet switch market at the end of the first quarter of 2025. With many AI workloads moving to Ethernet, Arista is well placed to capture even larger shares of the global data center AI networking market, estimated to be worth nearly $2 billion in 2025.

Customer base

Management has guided AI Networking revenues to exceed $1.5 billion in 2025. This includes around $750 million from the backend AI network alone, and there are dramatic improvements from 2022's total lack.

The majority of this $750 million revenue target is firmly supported by two hyperscalar clients. Microsoft and Meta Platform100,000 GPUs have been deployed in distributed AI clusters. Each of these clients is expected to account for at least 10% of Arista's revenue for 2025. The third hyperscalar client is also close to that scale, while the fourth hyperscalar client is on the way. With a highly sticky hyperschool customer base, Arista enjoys extremely short-term revenue visibility.

Arista is also expanding its customer base beyond hyperscalar. The company currently caters to 25-30 companies actively deploying AI clusters and NeoCloud customers (new generation cloud providers). It's individually smaller than Big Four Hyperscaler's clients, but offsets the delay in ramp-up of the fourth Hyperscaler customer and the loss of the fifth sovereign AI customer. The diversified revenue base also helped reduce Arista's overreliance on its small customer base.

Other markets

In addition to AI networking, Arista is strengthening its position in the enterprise campus and broad area network (WAN) segment. With Vecloud purchases, Arista offers an AI-Ready WAN portfolio that helps customers connect branch sites securely, while managing the traffic flow of their AI workloads more efficiently. Arista currently expects its campus switching operations to add revenues of between $750 million and $800 million in fiscal year 2025.

What about the rating?

Arista has trade into stocks, stocks, stocks, and stocks with 47.4x advance revenue, but this is not cheap. Additionally, the company also includes Nvidia and Broadcomand from Hyperscalar to explore internal options for networking spaces.

However, Arista's stock prices may continue to rise despite their high ratings multiples. The company's software products, consisting of EOS operating system and CloudVision Network Management and Automation Platform, help improve networking performance. Because GPUs use a lot of power, networking software plays a key role in reducing overall GPU usage. Arista's Ethernet also works with a variety of accelerators, providing greater flexibility for customers.

The data center industry is gradually moving from a network connection speed of 400 Gigabit per second for data to 800 Gigabit per second for data. Ethernet-based networking products, a robust software stack and long-term customer relationships allow the company to take advantage of this opportunity. Therefore, Arista could appear as a major winner in the AI ​​networking boom in the coming years.

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Manali Pradhan has no position in any of the stocks mentioned. Motley Fool has jobs and recommends Arista Networks, Meta Platforms, Microsoft, and Nvidia. Motley Fool recommends Broadcom and the following options are recommended: A $395 call at Microsoft for January 2026 and a $405 call at short term Microsoft for January 2026. Motley Fools have a disclosure policy.