Arista Networks (ANET): A Bullish Options Play Amid AI and Cloud Infrastructure Expansion

Arista Networks (ANET) has emerged as a standout performer in the AI and cloud infrastructure sector, driven by its strategic positioning in high-growth markets and robust financial execution. With Q2 2025 results exceeding expectations and analyst price targets rising in response, the stock presents a compelling case for structured options strategies. Among the most attractive setups is a bull call spread using the Dec 19, 2025 $145/$150 strikes, which balances risk and reward while leveraging ANET’s momentum.

Fundamental Catalysts: AI-Driven Growth and Expanding Margins

Arista’s Q2 2025 earnings report, released on August 5, 2025, underscored its dominance in AI networking. Revenue surged to $2.2 billion, a 30.4% year-over-year increase, with non-GAAP gross margin expanding to 65.6% [1]. This outperformance was fueled by surging demand for AI infrastructure and the company’s expansion into SD-WAN solutions. Analysts have since raised 2025 and 2026 earnings estimates, with 2025 EPS now projected at $2.58 [2].

The stock’s current price of $141.17 (as of September 4, 2025) [3] remains below the $147.50 average 12-month price target from 19 analysts, reflecting untapped upside potential. This gap is further supported by Arista’s strategic acquisitions, such as VeloCloud for SD-WAN capabilities, and its role in powering Broadcom’s (AVGO) networking chip demand [4].

Strategic Options Positioning: The Dec 19, 2025 $145/$150 Bull Call Spread

The bull call spread offers a low-risk, capital-efficient way to capitalize on ANET’s growth trajectory. By purchasing the $145 strike call and selling the $150 strike call, traders create a net cost of $210 per contract, with a maximum profit potential of $290 if ANET closes above $150 on Dec 19, 2025 [5]. The break-even price is $147.10, meaning the stock needs to rise just $6 from its current level to breakeven [5].

This structure is particularly advantageous given ANET’s low implied volatility, which reduces the cost of debit spreads and limits downside risk [5]. The maximum loss is capped at the $210 premium paid, making it an attractive alternative to outright stock purchases in a volatile market.

Institutional Activity and Market Sentiment

Recent unusual options activity suggests mixed sentiment. While large investors have executed bearish trades, including 11 reported bearish options trades in Q2 2025 [6], the bull call spread aligns with the broader bullish narrative. Institutional buyers, such as Firsthand Capital Management Inc., have increased holdings in ANET by 125% [7], signaling confidence in its long-term prospects.

Moreover, analyst upgrades reinforce the trade’s validity. Morgan Stanley raised its price target from $125 to $135, while Melius Research set a $160 target, reflecting optimism about AI-driven demand [1]. These upgrades, combined with Arista’s full-year revenue guidance increase to 25% growth, create a favorable backdrop for the bull call spread.

Conclusion: A Structured Approach to Capturing AI-Driven Growth

Arista Networks’ Q2 performance and strategic initiatives position it as a key beneficiary of the AI and cloud infrastructure boom. The Dec 19, 2025 $145/$150 bull call spread offers a disciplined way to participate in this growth, with defined risk and reward parameters. As analysts raise price targets and institutional activity intensifies, this options strategy provides a low-cost, high-probability entry for investors seeking to capitalize on ANET’s momentum.

Source:
[1] Arista Networks (ANET) Stock Forecast & Price Target, [https://www.tipranks.com/stocks/anet/forecast]
[2] Arista Networks (ANET) Q2 Revenue Surges To US$2.2 Billion, [https://finance.yahoo.com/news/arista-networks-anet-q2-revenue-055438495.html]
[3] Arista Networks Inc (ANET) Stock Historical Prices & Data, [https://finance.yahoo.com/quote/ANET/history/]
[4] Why Arista's Blowout Q2 Is Good News for Chip-Giant Broadcom, [https://www.marketbeat.com/originals/why-aristas-blowout-q2-is-good-news-for-chip-giant-broadcom/]
[5] A Strong Arista Stock Gives Rise To This Bullish Option Trade, [https://www.investors.com/research/options/arista-networks-anet-stock-bull-put-spread-options/]
[6] Arista Networks Unusual Options Activity, [https://news.futunn.com/en/post/58915190/arista-networks-unusual-options-activity]
[7] Arista Networks, Inc. $ANET Stock Position Increased by..., [https://www.marketbeat.com/instant-alerts/filing-firsthand-capital-management-inc-acquires-10000-shares-of-arista-networks-inc-anet-2025-08-31/]