Arista Networks Surges 3.78% Amid Sector-Wide Tech Infrastructure Rally – What’s Fueling the Momentum?

Summary
• Arista Networks (ANET) surges 3.78% to $129.825, outpacing the Communication Equipment sector leader Cisco (CSCO)’s 1.43% gain.
• Sector news highlights 5G advancements, NTN connectivity trials, and AI-driven network automation.
• Options chain shows heavy call buying at $130–$131 strikes, with implied volatility spiking to 41%+.
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Arista Networks’ sharp intraday rally aligns with a broader tech infrastructure boom driven by 5G expansion, satellite connectivity innovations, and AI-driven network optimization. With the stock trading near its 52-week high of $164.94, traders are betting on sustained momentum as global telecom providers accelerate infrastructure upgrades.

Sector-Wide Tech Infrastructure Momentum Drives ANET’s Rally
Arista Networks’ 3.78% surge reflects a broader Communication Equipment sector rally fueled by recent developments in 5G, non-terrestrial networks (NTN), and AI-driven automation. Sector news highlights Samsung and Keysight’s NTN connectivity demonstrations, Marvell’s $540M data center acquisition, and SoftBank’s hybrid-powered base station trials. These advancements signal heightened demand for high-performance networking solutions, directly benefiting Arista’s core data center and cloud infrastructure offerings. While ANET lacks company-specific news, its technical positioning and sector tailwinds create a self-fulfilling bullish narrative.

Communication Equipment Sector Gains Momentum as ANET Outpaces CSCO
The Communication Equipment sector is rallying on 5G infrastructure and AI-driven automation, with Arista Networks outperforming sector leader Cisco (CSCO) by 2.35 percentage points. CSCO’s 1.43% gain reflects broader sector strength, but ANET’s sharper move suggests stronger positioning in next-gen networking. This divergence highlights ANET’s focus on high-margin data center switching and cloud infrastructure, contrasting with CSCO’s more diversified but slower-growing portfolio.

Options Playbook: Capitalizing on ANET’s Volatility and Sector Tailwinds
• RSI: 42.09 (oversold)
• MACD: -1.23 (bearish), Signal Line: -0.70 (neutral)
• Bollinger Bands: $120.65–$137.85 (wide range)
• 200D MA: $118.26 (below price)
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ANET’s technicals suggest a short-term rebound from oversold RSI levels, with the 200D MA acting as a strong support. The stock is trading near the upper Bollinger Band, indicating potential for a pullback but also room to test the 52-week high. Sector momentum and AI-driven infrastructure spending justify a bullish bias.

Top Options Plays:
• ANET20260123C130
- Type: Call
- Strike: $130
- Expiration: 2026-01-23
- IV: 41.19% (moderate)
- Leverage: 36.30% (high)
- Delta: 0.5346 (moderate)
- Theta: -0.4908 (high decay)
- Gamma: 0.0472 (high sensitivity)
- Turnover: $107,991 (liquid)
- Payoff (5% up): $14.63/share
- Why: High leverage and gamma make this call ideal for a short-term rally, with liquid turnover ensuring easy entry/exit.

• ANET20260123C131
- Type: Call
- Strike: $131
- Expiration: 2026-01-23
- IV: 37.69% (moderate)
- Leverage: 46.21% (high)
- Delta: 0.4839 (moderate)
- Theta: -0.4486 (high decay)
- Gamma: 0.0517 (high sensitivity)
- Turnover: $23,794 (liquid)
- Payoff (5% up): $19.63/share
- Why: Slightly out-of-the-money but offers superior leverage and gamma for a 5% upside scenario, balancing risk and reward.

Aggressive bulls should target ANET20260123C131 into a break above $130.75 (intraday high).

Backtest Arista Networks Stock Performance
The backtest of ANET's performance after an intraday surge of at least 4% from 2022 to the present shows favorable short-to-medium-term gains, highlighting the stock's potential for positive movement following strong price days. The 3-Day win rate is 56.15%, the 10-Day win rate is 59.63%, and the 30-Day win rate is 69.72%, indicating a higher probability of positive returns in the immediate aftermath of a significant intraday gain. The maximum return observed was 10.60% over 30 days, suggesting that ANET can deliver substantial gains if the positive momentum continues.

Position for a Sector-Driven Rally – ANET’s Momentum Could Test $165
Arista Networks’ 3.78% surge is a microcosm of the Communication Equipment sector’s AI and 5G-driven renaissance. With the stock trading near its 52-week high and sector leader Cisco up 1.43%, the case for continued momentum is strong. Key levels to watch include the $130.75 intraday high and the $137.85 Bollinger Band ceiling. Traders should prioritize the ANET20260123C131 call for a high-leverage play on a potential $165 52-week high test. Watch for a breakdown below $127.37 (intraday low) to trigger a short-term correction.