Can Arista's Focus on CloudEOS Edge Help Gain a Competitive Edge?

Arista Networks, Inc. ANET is witnessing solid demand trends among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack. Arista has made several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. It has introduced new cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services. The versatility of Arista’s unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from other competitors in the industry. 

In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance and programmability, enabling integration with third-party applications for network management, automation and orchestration. The company boasts a comprehensive portfolio with the right network architecture for client-to-campus data center cloud and artificial intelligence (AI) networking, backed by three guiding principles. These are best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms. 

Arista continues to benefit from strong momentum and diversification across its top verticals and product lines, with an improved market demand supported by a flexible business model and solid cash flow. As more and more business enterprises transition to the cloud, the company is well-positioned for growth in the data-driven cloud networking business with proactive platforms and predictive operations. The company holds a leadership position in the 100-gigabit Ethernet switching share in port for the high-speed data center segment. It is increasingly gaining market traction in 200-and 400-gig high-performance switching products.

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. Nokia’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 11% over the past year compared with the industry’s growth of 36.2%

From a valuation standpoint, Arista trades at a forward price-to-sales ratio of 14.08, above the industry.

The Zacks Consensus Estimate for Arista’s earnings for 2025 has increased 0.4% over the past 60 days to $2.57 per share.

Arista currently carries a Zacks Rank #3 (Hold). 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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