As the bull market and AI data center buildout gain momentum, Nvidia (NVDA), Arista Networks (ANET), and Vertiv (VRT) continue to lead the way, and for good reason. While many new opportunities have emerged to play the AI theme, these three remain, in my view, the lowest-risk and most structurally important players in the space.
Each company plays a critical role in the backbone of data centers and enjoys distinct competitive advantages in its niche. Nvidia dominates in GPUs and AI compute, Arista Networks controls high-speed networking, and Vertiv provides the power and cooling solutions that keep hyperscale data centers running. They are the essential suppliers of the AI infrastructure boom.
I tend to trust the market, and the fact that these stocks continue to push new highs underscores their importance in this massive trend. That said, just this morning, President Trump posted market-moving comments about trade relations and tariffs with China. Investors may see a return of tariff-related volatility in the near term, potentially derailing the rally temporarily.
Even so, any correction, while it should hit even the leaders would likely be sharp, quick, and ultimately healthy, setting up fantastic buying opportunities in the weeks ahead. Below I will review the current fundamental and technical details of Vertiv, Nvidia and Arista Networks.
Image Source: Zacks Investment ResearchNvidia: How to Buy Shares on a Pullback
Nvidia remains the undisputed leader in AI computing, and the numbers underscore why it continues to command a premium valuation. The stock currently trades at a forward earnings multiple of 43.3x, with earnings projected to grow at a robust 32.8% annually over the next three to five years. On the top line, Wall Street expects sales to surge 57% this year, followed by another 32.3% growth next year, figures that far outpace nearly every other large-cap technology company.
When it comes to timing entries, picking levels on pullbacks is hardly an exact science. That said, I view the $150-$160 range, near Nvidia’s prior all-time highs, as an attractive zone to accumulate shares if the market delivers a correction. Such a move would represent about a 20% pullback from current levels and would reset the stock’s forward earnings multiple to a very attractive ~34x, especially considering the company’s extraordinary growth trajectory.
Image Source: TradingViewVertiv: Shares Push New All Time Highs
Vertiv has quietly become one of the most important enablers of the AI data center buildout, providing the power and liquid-cooling systems that keep hyperscale clusters running. The stock currently holds a Zacks Rank #2 (Buy), reflecting recent upward revisions to earnings.
Valuation remains rich, Vertiv trades at about 44x forward earnings, but growth expectations justify much of that premium. Wall Street projects earnings to compound at 29.7% annually over the next three to five years, with sales expected to climb 24.6% this year and another 15.8% next year. That combination of double-digit top-line expansion and rapid EPS growth puts Vertiv firmly in the top tier of industrial technology names.
Like Nvidia, timing pullbacks in a strong uptrend is just eyeball analysis. Vertiv made fresh all-time highs again today, but history shows that opportunities can arise during sharp corrections. A retracement back toward its recent breakout zone in the $150–$130 range would represent a 20%+ pullback and, importantly, bring the forward earnings multiple down to roughly 36.5x, a far more appealing level given the growth outlook.
Image Source: TradingViewArista Networks: Stock on a Relentless Bull Run
Arista Networks has been on an unstoppable run, cementing its position as the premier provider of high-speed networking equipment for AI data centers. As hyperscalers race to interconnect thousands of GPUs into massive training clusters, Arista’s switches and Ethernet solutions have become indispensable. That demand backdrop explains why the stock continues to command a premium valuation.
Currently, Arista trades at 56.2x forward earnings, making it the most expensive of the three AI infrastructure leaders. However, strong fundamentals and a one-of-a-kind product underpin that multiple. EPS is forecast to grow 18.7% annually over the next three to five years, while sales are projected to increase 25.4% this year and another 19.9% next year. That combination of steady double-digit growth and dominant market share keeps buyers coming in on every dip.
If Arista were to experience a correction similar to Nvidia and Vertiv, roughly a 20% pullback, the stock could retest the gap zone near $130. Such a move would reset its forward earnings multiple to about 46.2x, still elevated relative to peers but far more digestible given the company’s growth trajectory and critical role in AI networking.
Image Source: TradingViewShould Investors Buy Shares of NVDA, VRT and ANET?
Buying pullbacks is always easier said than done. Corrections can be sharp and unnerving, and investors often risk “catching a falling knife” if they rush in too early. My preference is to wait until daily ranges begin to narrow and volatility starts to cool following a selloff into buy zones, as this often signals that a new floor is forming and that the risk/reward has tilted back in favor of buyers.
That said, Nvidia, Vertiv, and Arista Networks are not speculative names. They are the backbone of the AI data center buildout, each with defensible competitive advantages and structural growth drivers that should extend into the next few years at least. A 20% correction in any of these leaders would not signal the end of the AI trade, but would more likely represent an opportunity to accumulate shares of a world-class businesses at a discount.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report Arista Networks, Inc. (ANET): Free Stock Analysis Report Vertiv Holdings Co. (VRT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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