Where will the ARIS networks be in 1 year? | Motley fool
This network company is still growing rapidly than its industrial peers.
ARIST NETWORKS‘ (Anet -4.58%) Shares have gathered more than 50%in the last 12 months. Since January this January, less than 10% is also under historically maximum. Computer networks have impressed investors with a robust growth rate and exposure to the flourishing cloud and the AI market.
But will Arista’s Stock rise even higher next year, or should she have a breath? Let’s look at the growth of the arista, its short -term catalysts and its appreciation to decide.
Understanding the business of Arista
ARIST controls a smaller slice of the market of network than Cisco systemsBut it differs from its larger competitor in several key ways. The modular operating system Arista, EOS, is compatible with a wider range of open network protocols than Cisco systems, often known to lock their customers to the “brick garden”.
In addition, Arista focuses on the sale of switches with lower latency, which are optimized for Hyperscale cloud networks, while Cisco combines a wider range of campus, branches, network network (WAN) and data centers.
Flexibility and Scalabibility of Arista made it the preferred hardware and software providers of the network for cloud and AI giants as Meta platform and Microsoft. Its Cloudvision platform also helps these customers easily monitor and analyze their deployment of the data center. So while Cisco is still considered a “One Stop Shop” to deploy large business networks, Arista appears as a game with higher growth on the widening cloud and AI.
From 2019 to 2024, Arista’s returned to compound yearly growth (Cagr) by 24%. Her cloud and hyperscale markets continue to expand throughout the pandemic, and its stricter product portfolio isolated it from disruption of the supplier chain that affects Cisco and other hardware companies for the network.
What happened to Arista in the last year?
In 2025, Arista’s 19.5%pink returned, its added large margin pink 200 basis points to 64.6%and its added profit per share (EPS) increased by 31.2%. Here is how fast it has grown in the last year.
| Metric | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|---|---|---|---|---|---|
| Return growth (year -on -year) | 16.3% | 15.9% | 20% | 25.3% | 27.6% |
| Gross margin | 64.2% | 65.4% | 64.6% | 64.2% | 64.1% |
| EPS Growth Growth (Yoy) | 39.2% | 32.9% | 31.1% | 25% | 30% |
Data source: ARIST NETWORKS. Yoy = year after year.
Arista’s recent growth was largely the driving speed expansion of the cloud and AI markets. However, its gross margins are falling because it sells a high mix of lower volume routers and goes to these large customers. It does not have much price force against those cloud titans, which often requires high volume discounts.
At the same time, inflation, increased interest, tariffs and other macro -eds control their component and the cost of the supply chain high.
For comparison, the modified large margin of Cisco in the last quarter has expanded the year -on -year by 30 basis points to 68.6%. These higher margins reflect the strong price force of Cisco, which strengthens through aggressive association strategies.
In the second quarter of 2025, ARIS expresses its return to an increase by 24.3%year -on -year because its modified gross margin drops to 63%. For the whole year, his expected analysts returned and added EPS to increase by 20% and 13%. Most of this growth should be fed with a growing acceptance of their 800g Ethernet products to process workload AI.
Where will the Arista’s shares be a year?
ARIST is growing rapidly, but it can be considered 50 times its end earnings. Cisco, which grows at a much sweet rate, trades with 28 times earnings.
For 2026, Arista returns and the modified EPS so that they grow by 18% and 17%, and ai the boom continues. If ARIST coincides with these estimates and still trading with 50 times earnings, its stock price could increase by more than 20% to $ 150 in the next 12 months. However, if it is traded with 30 times earnings, its shares could drop by more than 25% to $ 90.
Therefore, Arista’s upsoid potential could be limited by its award next year, when investors are waiting for its robust revenue growth to compensate its decrease in gross margins. It could still make some modest profits, but it probably won’t replicate his assembly from the last 12 months.
Leo Sun has positions on metach -handles. Motley Foll has positions and recommends ARIST Networks, Cisco Systems, Meta Platform and Microsoft. Motley Beble recommends the following options: long January $ 2026 395 calls on Microsoft and short January 2026 405 calls on Microsoft. Motley fool has a publication of politics.