Can Arista Gain From an Integrated Cloud Networking Solution Focus?

Arista Networks, Inc. ANET is focusing on offering end-to-end networking solutions to a wider range of customers and augmenting its secure access service edge (SASE) networking gear, which supports remote workers and branch offices. The buyout of VeloCloud SD-WAN (Software-Defined Wide Area Network) portfolio from Broadcom Inc. AVGO has offered Arista complementary products and services with a production-proven SD-WAN architecture, a dedicated customer base of more than 20,000 and a seasoned sales channel. 

With offerings like VeloRAIN and VeloBrain, which use artificial intelligence (AI) to improve the security and performance of distributed AI workloads and help network engineers better manage their environments, VeloCloud is a strategic fit for Arista’s business. It delivers converged cloud networking from the edge to the data center and cloud, with end-to-end automation, application continuity and branch transformation, which empowers enterprises to transform their data centers with modern, high-performance operations.

VeloCloud complements Arista’s campus, data center and cloud routing (CloudEOS), enabling end-to-end SD-WAN deployment under one operating system. With customers deploying transformative cloud networking solutions, Arista has announced several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. It has introduced cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services, while supporting video conferencing applications like Microsoft Teams and Zoom.

Other Tech Firms Focusing on Cloud Networking

Cisco Systems, Inc. CSCO is the largest player in the networking space. The company has a strong presence in the router and switch market. It has retained a leadership position in WLAN and Ethernet switching and is rapidly expanding its presence in the network security domain. Cisco provides Next-Generation Network Routers that transport data, voice and video information from one IP network to another. It is expanding its Agentic AI footprint with the introduction of Webex AI Agent, Cisco AI Assistant for Webex Contact Center, Workflow Automation in Cisco AI Assistant for Webex, AI Capabilities in Webex Control Hub and Webex Calling Customer Assist. Its strategy of integrating AI across security and collaboration platforms and developing agentic capabilities across the portfolio is a key catalyst for improving customer experience.

Nokia Corporation NOK has evolved into a major player in cloud computing infrastructure by integrating networking, edge computing and software automation for telcos, cloud providers and enterprises. The company is poised to benefit from copper and fiber deployments of passive optical networking. It is reportedly the only global supplier offering Open Radio Access Network (O-RAN) with commercial 5G Cloud-RAN networks. Nokia intends to accelerate strategy execution, sharpen customer focus and reduce long-term costs. At the same time, it focuses on building a strong, scalable software business and expanding it to structurally attractive enterprise adjacencies. NOK’s C-Band portfolio supports 5G standalone and non-standalone networks, cloud-based implementations and O-RAN products.

ANET’s Price Performance, Valuation and Estimates

Arista has surged 48.7% over the past year compared with the industry’s growth of 36.8%

From a valuation standpoint, Arista trades at a forward price-to-sales ratio of 17.07, above the industry.

The Zacks Consensus Estimate for Arista’s earnings for 2025 has increased 9.8% over the past 60 days to $2.81 per share.

Arista currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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