Bull of the Day: Arista Networks, Inc. (ANET)

Arista Networks, Inc. ANET is a high-tech picks-and-shovels AI stock that more than doubled its revenue and earnings between 2022 and 2025.

The AI infrastructure company, which works directly with AI hyperscalers Microsoft and Meta and other big tech firms, is projected to follow up its impressive artificial intelligence-boosted expansion with 35%+ revenue and earnings growth in 2026 and another ~25% next year.

Arista’s earnings outlook surged again after it reported another strong beat and raise quarter in early August.

Its upbeat EPS revisions earn ANET a Zacks Rank #1 (Strong Buy) and extend an impressive streak of improving earnings estimates as it successfully rides the AI data center boom and other technology trends.

The back-end technology infrastructure company designs and builds tons of the critical, high-speed tech-based “plumbing” that massive AI data centers rely on. This means that investors don’t have to worry about picking the front-facing winners as OpenAI, Anthropic, Google, and tons of others duke it out in the AI arms race.

ANET’s balance sheet is fantastic, and it's churning out stellar free cash flow growth. Plus, the stock is finding technical support after pulling back from its early-August peaks, and its average Zacks price target implies 30% upside.

All in, Arista stock appears to be one of the better long-term buy-and-hold stocks in the broader AI infrastructure industry.

It is worth stressing that despite AI bubble fears, $750 billion in new AI capex initiatives were announced in August alone, adding to a pipeline that’s already measured in trillions of dollars over the next several years.

Is ANET the Best AI and Tech Stock to Buy Now and Hold Forever?

Arista is a client-to-cloud networking powerhouse for large AI, data center, campus, and routing environments. Its growing portfolio helps connect computers, servers, and beyond to ensure fast and reliable data transfer.

In layman’s terms, ANETdesigns and builds the critical, high-speed technological “plumbing” networks that massive cloud computing and AI data centers depend on. Put differently, Arista makes the networking gear that enables huge data centers to talk to themselves at extreme speed.

When Microsoft, Meta, and others train AI models, thousands of chips must pass data back and forth constantly. Arista’s switches and beyond are the highway or tech-based railways that those chips use.

Arista’s offerings like high-speed Ethernet switches and networking gear are vital behind-the-scenes cogs helping massive AI data centers perform at their absolute peak.

ANET’s CEO Jayshree Ullal explained the company’s role in the current tech supercycle succinctly in prepared Q2 remarks, noting that “Customers see networking as the central nervous system for infrastructure from the client to campus to data and AI centers.”

Microsoft MSFT and Meta META are two of Arista’s largest clients, highlighting its best-in-class offerings and ability to compete against rivals such as Cisco.

The explosion of cloud computing, big data, and most recently and critically, AI, puts Arista in a position to continue expanding and thriving as these areas of technology drive the economy and Wall Street.

Goldman Sachs projects that total global AI capex will reach $7.6 trillion between 2026 and 2031, across compute, data centers, and power. The AI hyperscalers alone are projected to spend ~$800 billion in AI-related capex in 2026 and then ramp up again in 2027.

The Top-Rank AI Stock’s Strong Growth and Outlook

ANET is thriving amid the ongoing AI infrastructure boom. And it's poised for long-term success even as the technologies mature beyond their rapid growth phase.

The company is churning out stellar free cash flow growth that’s helping improve its balance sheet. Arista is sitting on $13.3 billion in cash and equivalents and $23.7 billion in total assets vs. near-zero debt and $8.9 billion in total liabilities. 

The company more than doubled its revenue between 2022 ($4.38 billion) and 2025 ($9.00 billion), after more than doubling its top line between 2016 and 2021.

The picks-and-shovels AI stock also more than doubled its GAAP earnings between 2022 and 2025, soaring from $1.07 a share to $2.75 per share last year.

Most recently, it beat our Q2 earnings estimate by 15% on August 4 and upped its outlook once again after reporting its “first $3 billion quarter,” boosted by the ongoing success of its Arista 2.0 platform strategy.

Arista's Q3 earnings estimate surged 19% after its Q2 release, with its FY26 EPS estimate up 11% and its FY27 outlook 14% higher.

ANET’s upward earnings revisions land the stock a Zacks Rank #1 (Strong Buy) and extend its run of upward EPS revisions. It has also beaten our EPS estimates for five years running.

Our detailed analyst report about Arista on Zacks.com highlights a concise bull case for why investors should buy the stock: “Arista strengthened its position in AI networking as enterprises and hyperscale customers expand Ethernet-based AI infrastructure.”

“During the second quarter of 2026, the company exceeded 100 cumulative AI fabric customers using Etherlink switches, compared with only a handful of early adopters in 2024. Management also expects AI revenue to reach at least $3.6 billion in 2026, supported by scale-up, scale-out and scale-across deployments.”

Looking ahead, Arista is projected to grow its revenue by another 39% in FY26 (after 29% sales growth last year) and 26% in 2027 to reach $15.80 billion next year.

The networking infrastructure firm is projected to grow its adjusted EPS by 36% in 2026 and 24% next year to $4.99 per share. The chart above showcases that ANET is expected to expand its bottom line to over $6.00 per share in FY28.

Buy the AI Picks-and-Shovels Stock Now?

ANET soared ~3,500% over the past decade, crushing the Zacks Tech sector’s ~485% and the all of the Magnificent 7 tech stocks outside of Nvidia. The stock has ripped ~47% higher in 2026 to outclimb Tech’s 18% and leave two of its biggest clients, Microsoft and Meta, in the dust.

The AI stock has dropped around 9% from its August records, and its average Zacks price target implies 30% upside.

ANET found support at its 50-day moving average on Monday, September 14, and it trades at neutral RSI levels.

Valuation-wise, Wall Street has paid a significant premium for ANET for the past 10 years. Still, Arista trades at a 25% discount to its highs at 43.6X forward 12-month earnings and 50% below its peaks when factoring in its earnings growth outlook, with a PEG ratio of 1.9.

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

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