Arista Networks: Ethernet Winning

Arista Networks, Inc. develops, markets, and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company's cloud networking solutions consist of extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms. It also provides post contract customer support services, such as technical support, hardware repair and parts replacement beyond standard warranty, bug fix, patch, and upgrade services. The company serves a range of industries comprising internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, and others. It markets and sells its products through distributors, system integrators, value-added resellers, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.

Executive Summary

Arista Networks (ANET) is the "Switzerland" of networking. Nvidia pushes its proprietary "Infiniband" technology for connecting GPUs. But the rest of the world (Microsoft, Meta, Broadcom) wants "Ethernet," the open standard. Arista builds the best Ethernet switches in the world. As AI clusters grow to 100k GPUs, Ethernet is the only open standard that scales.

1. EOS: The Software Moat

Arista didn't win on hardware; they won on software.

EOS: Their operating system is programmable and crash-resistant. Hyperscalers love it because they can write their own code on top of the switch. Cisco's code is spaghetti; Arista's code is elegant.

2. The Back-End Network

AI clusters have two networks: The Front-End (connecting to the internet) and the Back-End (GPUs talking to GPUs). Arista is winning the massive Back-End buildout.

Risks to the Thesis

Nvidia: If Nvidia successfully forces everyone to use Infiniband (by bundling it with GPUs), Arista gets shut out of the AI cluster.
White Box: Amazon builds its own switches. If Microsoft and Meta decide to build their own hardware, Arista loses its biggest customers.

Conclusion

Arista is the highest quality networking company. Betting on Arista is betting on "Open Standards" beating "Proprietary Walled Gardens."

Arista Networks: Ethernet Winning

Executive Summary

1. EOS: The Software Moat

2. The Back-End Network

Risks to the Thesis

Conclusion

ANET Valuation Model

Market Update: ANET - 2025-12-22

Arista Networks, Inc. (ANET)

INVESTMENT PRIMER

Arista: The Backbone of AI Clusters

Market Update: ANET - 2025-12-22