Arista 2.0 Strategy Picks Up Steam: Can ANET Ride This Wave?

Arista Networks, Inc. ANET is gaining healthy momentum as the Arista 2.0 strategy is resonating well with customers. The company surpassed shipments of 150 million cumulative ports in the fourth quarter of 2025, with its modern networking platforms being foundational for the transformation from silos to centers of data. The strategy comprises three components that are likely to drive growth over the next few years. The first component is focused on plans to invest in core businesses by rolling out new solutions and improved AI (artificial intelligence) offerings. Secondly, Arista aims to emphasize more on software-as-a-service for improved revenue visibility. Last but not least, the company plans to enter adjacent markets to target a broader customer base.

Arista is gradually becoming the preferred network innovator of choice for client-to-cloud and AI networking, with a highly differentiated software stack and a uniform CloudVision software foundation. The company boasts a comprehensive portfolio with the right network architecture, backed by three guiding principles. These include the 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 should benefit from its software-driven, data-centric approach that helps customers build their cloud architecture and enhance the cloud experience they offer their clients. The company holds a leadership position in 100-gigabit Ethernet switching for the high-speed datacenter segment. It is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations. The profitability of the company remains bolstered by highly leveraged R&D and go-to-market models, combined with continued disciplined cost management.

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.

Ciena Corporation CIEN is likely to benefit from the increased network traffic, higher demand for bandwidth and adoption of cloud architecture. Ciena is currently the only provider offering a 1.6 terabit WAN solution and anticipates maintaining this lead in next-generation optical technology for at least two years. It is progressing on industry-first wins with cloud providers. Additionally, it is expanding its customer base for coherent routing and securing deals with international service providers and enterprise clients. Ciena’s Cloud and Service Provider customers are prioritizing network investments to support AI-driven traffic growth, highlighting long-term opportunities for its Systems and Interconnects businesses.

ANET’s Price Performance, Valuation and Estimates

Arista has surged 45.1% over the past year against the industry’s decline of 15.3%

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From a valuation standpoint, Arista trades at a forward price-to-sales ratio of 14.46, above the industry tally of 6.32.

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The Zacks Consensus Estimate for Arista’s earnings for 2026 has increased over the past 60 days.

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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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