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    Arista Networks (ANET) Is Down 9.7% After AMD‑Meta AI Pact Expands Hyperscaler Buildouts – Has The Bull Case Changed?

    Simply Wall St·02/25/2026 04:45:07
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    • In February 2026, Advanced Micro Devices announced a multi‑year AI infrastructure agreement with Meta Platforms, expanding their collaboration on hardware and software to support next‑generation AI workloads and lifting sentiment around key networking providers such as Arista Networks.
    • The development underscores how hyperscaler AI buildouts and aligned chip‑to‑network ecosystems can influence demand expectations for Arista’s Ethernet‑based data center and AI networking solutions.
    • Against this backdrop, we’ll examine how the expanded AMD‑Meta AI infrastructure agreement could reshape Arista Networks’ AI‑driven investment narrative.

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    Arista Networks Investment Narrative Recap

    To own Arista Networks, you generally have to believe that Ethernet based AI and cloud networking will keep gaining traction with hyperscalers, and that Arista can defend its margins despite customer concentration and rising competition. The AMD Meta AI infrastructure agreement has lifted sentiment around AI data center buildouts, but it does not materially change Arista’s most immediate swing factors: hyperscaler order timing and exposure to tariff or trade related shocks.

    The most relevant recent milestone here is Arista’s Q4 2025 earnings, where revenue reached US$2,487.8 million and net income was US$955.8 million, with full year 2025 revenue of US$9,005.7 million. That performance, alongside Q1 2026 revenue guidance of about US$2.6 billion, has kept attention on AI driven cloud demand as the key near term catalyst, while also highlighting execution risk around deferred revenue and experimental AI deployments.

    Yet investors should also be aware that growing dependence on a handful of hyperscale AI customers could quickly amplify the impact of any shift in ordering behavior...

    Read the full narrative on Arista Networks (it's free!)

    Arista Networks’ narrative projects $13.6 billion revenue and $5.4 billion earnings by 2028. This requires 19.5% yearly revenue growth and about a $2.1 billion earnings increase from $3.3 billion today.

    Uncover how Arista Networks' forecasts yield a $163.37 fair value, a 27% upside to its current price.

    Exploring Other Perspectives

    ANET 1-Year Stock Price Chart
    ANET 1-Year Stock Price Chart

    Some of the most optimistic analysts were already modeling Arista’s revenue near US$15.4 billion and earnings around US$5.9 billion by 2028, so if you lean toward that view, the AMD Meta news may strengthen your belief that AI driven Ethernet adoption can offset the customer concentration risks you are taking on.

    Explore 17 other fair value estimates on Arista Networks - why the stock might be worth as much as 51% more than the current price!

    Form Your Own Verdict

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

    Ready For A Different Approach?

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.