Is Arista Networks (ANET) a Must-Have in the AI-Driven Data Center Infrastructure Playbook for 2026?

The rise of artificial intelligence has ignited a seismic shift in data center infrastructure, creating both opportunities and challenges for companies positioned at the intersection of networking and compute demand. Arista Networks (ANET), a leader in high-performance networking solutions, has emerged as a focal point for investors seeking exposure to this transformation. But as the company navigates supply constraints, valuation skepticism, and the explosive growth of AI-driven infrastructure, the question remains: Is Arista a must-have in the 2026 playbook?

Growth Drivers: AI and Hyperscale Demand

Arista's trajectory is inextricably linked to the AI revolution. According to a report by , the company is "the AI data center networking stock to watch," with hyperscale clients like Microsoft and Meta driving a significant portion of its demand. For 2026, Arista has guided to $10.65 billion in revenue, a 20% year-over-year increase from its 2025 projection of $8.87 billion. Within this, AI-related revenue is expected to surge from $1.5 billion in 2025 to $2.75 billion in 2026, reflecting the accelerating adoption of AI infrastructure by cloud providers and enterprises.

This growth is underpinned by Arista's strategic product launches, including its 7th-generation 7280R series switches, which are optimized for AI workloads and high-bandwidth applications. The company's ability to align with the technical needs of AI-such as low-latency networking and scalable architectures-positions it as a critical enabler of the next phase of cloud computing.

Supply Chain Constraints: A Temporary Headwind

Despite its strong demand profile, Arista has faced periodic supply chain bottlenecks, a challenge shared by many tech firms. In Q3 2025, the company reported $2.31 billion in revenue, exceeding expectations, but acknowledged that shipment timing had been affected by component shortages. However, Arista's management has demonstrated disciplined execution, maintaining non-GAAP gross margins between 62% and 63% for Q4 2025, a testament to its operational efficiency.

The key question is whether these constraints will persist into 2026. While no company is immune to global supply shocks, Arista's focus on vertical integration and strategic inventory management suggests it is better prepared than many peers. For now, the bottlenecks appear to be moderating, with the company guiding for Q4 2025 revenue between $2.3 billion and $2.4 billion, a sign of resilience.

Valuation: A Compelling Case for Long-Term Investors

Arista's stock currently trades at $137.26, a discount to the narrative consensus fair value estimate of $159.80. This gap suggests the market may be underestimating the company's long-term potential, particularly given its role in the AI infrastructure ecosystem. project the stock could reach $176 by December 2027, implying a 38% total return from current levels.

The valuation discount is partly attributable to short-term concerns about supply chain volatility and macroeconomic uncertainty. However, Arista's financials tell a different story: its gross and operating margins remain robust, and its revenue growth trajectory is among the most consistent in the tech sector. For investors with a multi-year horizon, the current price offers a compelling entry point, especially as AI demand continues to outpace supply.

Conclusion: A Strategic Bet on the Future of Networking

Arista Networks is not without risks. Supply chain disruptions, regulatory scrutiny of tech giants, and the inherent volatility of AI-driven markets could all temper its growth. Yet, the company's unique positioning-combining cutting-edge technology, strong customer relationships, and disciplined execution-makes it a standout in the AI infrastructure space.

For investors constructing a 2026 portfolio, Arista represents more than a speculative play; it is a strategic bet on the infrastructure that will power the next decade of digital transformation. While valuation concerns warrant caution, the fundamentals suggest that ANET is undervalued relative to its long-term potential. In an era where AI is reshaping industries, Arista's role as a networking backbone is too significant to ignore.