Arista Networks: Undervalued Catalyst in the AI Networking Boom

The AI infrastructure revolution is reshaping the technology landscape, and Arista Networks (ANET) stands at the intersection of innovation and demand. Yet, despite its robust product roadmap, strategic hyperscaler partnerships, and strong financial performance, the market appears to be underestimating Arista's potential to capitalize on this transformative wave. With AI workloads driving exponential growth in data center networking, Arista's 800G/1.6T roadmap, collaboration with Meta on Dense Switch Fabric (DSF) architecture, and expanding ties with Oracle position it as a critical enabler of next-generation AI infrastructure.

800G/1.6T Roadmap: Building the Backbone for Zettascale AI

Arista's focus on high-speed, low-latency networking aligns perfectly with the demands of large-scale AI deployments. The company's EOS Smart AI Suite, which includes Cluster Load Balancing (CLB) and CloudVision Universal Network Observability (CV UNO), is already deployed on 400G/800G platforms and is set to expand to 1.6T platforms in 2025 according to Arista's announcement. CLB optimizes traffic flow in AI clusters using RDMA-aware flow placement, reducing latency and avoiding congestion, while CV UNO provides real-time visibility into AI job performance, enabling proactive troubleshooting.

Arista's roadmap also emphasizes energy efficiency through innovations like Low-Power Optical (LPO) and No-Optics (NPO) technologies, which reduce power consumption in high-capacity switches. These advancements are critical as hyperscalers like Meta and Oracle deploy GPU clusters nearing 100,000 nodes, with Arista's clients expected to surpass this threshold by 2026. The company's collaboration with Broadcom on co-packaged optics further ensures compatibility with future AI architectures, solidifying its position in the 1.6T era.

Strategic Collaborations: DSF with Meta and Oracle's AI Ambitions

Arista's partnership with Meta on Dense Switch Fabric (DSF) architecture represents a pivotal moment in AI networking. At the 2025 OCP Global Summit, Meta unveiled a non-blocking DSF fabric capable of interconnecting up to 18,432 XPUs across entire data centers, a feat enabled by Arista's 7700R4 Distributed Etherlink Switch (DES). This architecture supports lossless transport and topology agnosticism, addressing the scalability and performance challenges of AI clusters like Meta's Prometheus.

In parallel, Arista is collaborating with Oracle through the Ethernet for Scale-Up Networking (ESUN) initiative, which aims to standardize Ethernet solutions for AI-scale systems. While Oracle has partnered with NVIDIA on Spectrum-X switches for its giga-scale AI supercomputers according to industry reports, Arista's Cluster Load Balancing (CLB) has been integrated into Oracle's Acceleron platform to enhance AI workload efficiency as announced in Q4 2025. Oracle has publicly endorsed CLB's ability to reduce flow contentions, underscoring the value of Arista's innovations in cloud-based AI deployments.

Financial Strength and Market Position

Arista's Q3 2025 financial results underscore its ability to scale with AI demand. Revenue reached $2.31 billion, a 27.5% year-over-year increase, with non-GAAP net income of $962.3 million and EPS of $0.75, both exceeding expectations. The company's R4 Series platforms, designed for AI-enabled data centers, are a key growth driver, with Arista projecting $2.75 billion in AI-related revenue by 2026.

Despite these fundamentals, Arista's stock has faced short-term volatility, partly due to competition from rivals like NVIDIA, which has secured AI infrastructure contracts with Meta and Oracle. However, Arista's leadership in open Ethernet standards and its deep engineering partnerships with hyperscalers provide a durable competitive edge. The company's CEO emphasized its "leadership in AI infrastructure" during the Q3 earnings call, citing strategic product innovation and customer demand as tailwinds for mid-teens revenue growth through 2029.

Why the Market Is Underestimating Arista

The undervaluation of Arista's AI-driven potential may stem from several factors. First, the market often underappreciates the role of Ethernet-based fabrics in AI infrastructure, favoring proprietary solutions. Yet, Arista's open, scalable architecture is gaining traction as hyperscalers prioritize interoperability and cost efficiency according to market analysts. Second, while NVIDIA's dominance in AI chips and switches is well-known, Arista's end-to-end networking solutions-from CLB to 1.6T platforms-are less visible but equally critical to AI performance as highlighted in industry reports.

Finally, Arista's financials, though strong, are being discounted due to short-term competition and valuation concerns. However, its $2.3 billion Q3 revenue and expanding AI roadmap suggest a compound growth story that the market has yet to fully price in as reported in the Q3 earnings release. With AI infrastructure spending projected to surge, Arista's strategic partnerships and technical execution make it a must-watch play in the AI networking boom.