ANET
Arista Networks, Inc.NYSEValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Aug 17, 2026 · Valuation Aug 12, 2026
What drives ANET's base case?
base-case thesisArista has grown revenue between 27% and 38% in every one of the last six reported quarters, and management has now raised its 2026 outlook three times to about $12.6 billion. Its Ethernet AI switch business has expanded from four or five customers in 2024 to more than 100, and a new 1.6-terabit product line goes into production in 2027, so there is a visible reason for growth to stay elevated near term. This case assumes that momentum carries into 2027 and then fades naturally as the revenue base approaches $20 billion and the law of large numbers takes over. Profitability holds near recent levels, with slightly lower product margins on big cloud deals offset by spreading fixed costs over far more revenue.
What shapes the assumptions
Management raised FY2026 revenue guidance three times to ~$12.6B
Full-year revenue guidance
Raises revenue growth
AI Etherlink customer count expanded past 100 from 4-5 in 2024
AI fabric customer count
Raises revenue growth
Operating margin held 41.5%-45.4% across the last eight quarters
Reported quarterly operating margin
Informs operating margin
Contract manufacturing keeps capital spending near 1% of sales
Capital intensity
Lowers reinvestment
Revenue base approaching $24B by year five
Absolute revenue scale
Lowers terminal growth
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 62.8% a year. Over the last 5 years it grew 32.0% a year — so the price assumes more than it has delivered.
What else could explain it?›
- How confident is this estimate?
- Robustness 62.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Base inputs from financials
source period →Base revenue (TTM)
$10.5B
Diluted shares
1,276,000,000
Net cash
$240M
Bear
medium confidence$26.76
IV / share
-86.5% vs $198.82
- Explicit cash flows
- $8.92
- Terminal value
- $17.65
- Net cash
- $0.19
- Intrinsic value / share
- $26.76
66.0% of the value rests on the terminal value — elevated dependency.
Revenue growth22.0% → 12.0% → 7.0% → 5.0% → 4.0%medium
How derived: Starting from TTM revenue of $10.54B and management's ~$12.6B FY2026 guide, year one still captures the guided second half (~22%), but this case then assumes the AI build-out enters a digestion phase like the one that took Arista from +30.7% in 2018 to +12.1% in 2019 and -3.9% in 2020, with Nvidia Spectrum-X and Broadcom-silicon white boxes taking share at Arista's two >10% cloud customers, so growth decays to mid-single digits by year five.
Why this confidence: Company has an actual precedent digestion cycle (2019-2020) to calibrate against ↑, Year-one path is partly locked in by management's own FY2026 revenue guidance ↑, Five-year horizon for a cyclical capex-driven end market ↓, Timing of an AI-capex pause is unknowable and current order trends contradict it ↓
Evidence for
- Arista has already lived through a cloud digestion cycle: revenue growth fell from 30.7% in 2018 to 12.1% in 2019 and then -3.9% in 2020, showing that hyperscaler order pauses can flip growth negative within two years.[Arista reported annual revenue history (2018-2020 actuals)]· primary
- Management stated it expects one and possibly two customers to each exceed 10% of revenue, keeping Arista dependent on Microsoft's and Meta's shipment mix.[Arista Q2 2026 earnings call transcript]· primary
- Nvidia's Spectrum-X Ethernet photonics switches are set to ship in the second half of 2026, directly encroaching on Ethernet AI accounts, while Broadcom merchant silicon enables white-box price pressure in hyperscale switching.[Arista rides AI past Cisco, now Nvidia looms]· secondary
Evidence against
- Arista raised FY2026 revenue guidance for the third time this year to ~$12.6B (~40% growth) and delivered a record $3.036B quarter, up 37.7% year over year — no sign of deceleration yet.[Arista Q2 2026 earnings release (SEC 8-K Ex-99.1)]· primary
- Arista's AI Etherlink customer base has broadened to more than 100 cumulative customers, up from four or five in 2024, which reduces single-customer dependence.[Arista Q2 2026 earnings call transcript]· primary
Operating margin35.5%medium
How derived: Trailing four-quarter GAAP operating margin is about 43% (Q3'25 42.4%, Q4'25 41.5%, Q1'26 42.7%, Q2'26 45.4%), but this case assumes the ~63% gross-margin guide keeps sliding as hyperscale AI deals and white-box price competition compress pricing, while R&D headcount for 1.6T products cannot be cut as fast as revenue slows, pulling steady-state margin down toward the mid-30s last seen in 2019-2020.
Why this confidence: Eight quarters of reported operating margin give a tight historical band to anchor on ↑, Gross-margin guidance of ~63% is a disclosed, directional company input ↑, Assumed margin is far below every quarter in the given history, so it relies on a regime change ↓, Competitive pricing pressure is evidenced mainly by secondary industry sources ↓
Evidence for
- Management guided Q3 2026 gross margin to about 63%, below the mid-60s levels Arista has historically earned, consistent with mix shift toward lower-margin large cloud and AI deals.[Arista Q2 2026 earnings call transcript]· primary
- Broadcom supplies merchant Tomahawk/Jericho silicon that enables white-box vendors, driving price pressure specifically in the hyperscale data-center switch segment Arista serves.[AI networking vendors and the Ethernet competitive landscape, 2026]· secondary
Evidence against
- Reported GAAP operating margin expanded to 45.4% in Q2 2026 from 44.7% a year earlier, and non-GAAP operating margin reached 49.9% versus 48.8%, so margins are currently rising, not falling.[Arista Q2 2026 earnings release (SEC 8-K Ex-99.1)]· primary
- Management raised full-year 2026 operating margin guidance to 48-49% on a non-GAAP basis.[Arista Q2 2026 press release, investor relations]· primary
Tax rate23.0%high
How derived: Arista has guided to a structural effective tax rate of about 21.5%; this case nudges it to 23% because lower profitability erodes the value of FDII and R&D credits as a share of pre-tax income, and OECD Pillar Two minimum taxation plus state taxes set a hard floor above the 21% federal statutory rate.
Why this confidence: Company discloses an explicit structural tax rate ↑, US federal statutory rate anchors the range narrowly ↑, Future international tax policy over five years is uncertain ↓
Evidence for
- Arista has publicly framed 21.5% as its structural tax rate, 'back to the usual historical rate', establishing the base from which a stressed case rises modestly.[Arista FY2025 fourth-quarter and year-end results]· primary
Evidence against
- Arista updated its non-GAAP tax methodology in Q4 2025 to stop excluding discrete indirect stock-compensation effects, which management said better reflects the company's effective rate — implying the reported rate can sit at or below 21.5% in strong equity years.[Arista FY2025 fourth-quarter and year-end results]· primary
Reinvestment rate24.0%medium
How derived: Arista owns no fabs and outsources manufacturing, so historical capex has run near 1% of revenue and most invested capital is inventory and supply prepayments; with growth decaying to 4% in this case, less working capital is needed, but the company must keep funding 1.6T-era R&D and carry inventory against long lead times, so roughly a quarter of after-tax operating profit is reinvested.
Why this confidence: Asset-light outsourced manufacturing model is explicitly disclosed ↑, Reinvestment is scaled directly off this case's own growth path, keeping it internally consistent ↑, Working-capital swings from inventory and prepayments are volatile year to year ↓, No forward capex guidance is provided by the company ↓
Evidence for
- Arista uses contract manufacturers rather than owning fabrication facilities, which structurally keeps its capital intensity low relative to revenue.[Arista FY2024 Form 10-K, business and manufacturing]· primary
- Slower assumed revenue growth of 4-12% mechanically requires less incremental working capital than the 28.6% growth Arista posted in 2025.[Arista reported annual revenue, FY2025]· primary
Evidence against
- Arista's disclosed purchase commitments and inventory builds ahead of component lead times can consume cash even when revenue growth stalls, so reinvestment may not fall proportionally with growth.[Arista FY2024 Form 10-K, purchase commitments and inventory]· primary
Terminal growth2.0%medium
How derived: A perpetual growth rate cannot exceed the long-run nominal economy, proxied by the 4.68% 10-year Treasury yield; this case sets terminal growth at 2%, below long-run nominal GDP, because it assumes Arista ends the forecast as a share donor to Nvidia's Spectrum-X and merchant-silicon white boxes in a commoditizing Ethernet switch market.
Why this confidence: Bounded by an objective, citable risk-free rate ceiling ↑, Perpetual rates are inherently unobservable ↓, Assumed long-run share loss rests partly on secondary industry commentary ↓
Evidence for
- The 10-year Treasury yielded about 4.68% on 12 August 2026, capping any defensible perpetual nominal growth rate well below that level.[US 10-Year Treasury Note Yield]· primary
- Nvidia owns the scale-up networking layer Arista does not reach until 2027, and Broadcom-enabled white boxes compete in Arista's core hyperscale segment, supporting a below-GDP terminal rate.[Arista rides AI past Cisco, now Nvidia looms]· secondary
Evidence against
- The AI networking market grew to roughly $15.4 billion per quarter at nearly 40% year-over-year growth in 2026, suggesting the addressable market itself may compound faster than 2% for a long time.[AI networking market sizing, 2026]· secondary
Base
medium confidence$45.94
IV / share
-76.9% vs $198.82
- Explicit cash flows
- $12.78
- Terminal value
- $32.98
- Net cash
- $0.19
- Intrinsic value / share
- $45.94
71.8% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth30.0% → 22.0% → 17.0% → 13.0% → 10.0%high
How derived: Starting from TTM revenue of $10.54B, the guided ~$12.6B FY2026 implies a second half near $6.86B, and carrying that momentum into the first half of 2027 supports about 30% next-twelve-month growth; from there this case assumes an orderly decay as the law of large numbers bites on a base approaching $20B, with the 1.6-terabit production ramp in 2027 cushioning the mid-years before growth normalizes to about 10%.
Why this confidence: Year one is largely covered by explicit management revenue guidance ↑, Six consecutive quarters of 27-38% year-over-year growth establish a clear trend ↑, Named 2027 product catalyst (1.6T) supports the mid-forecast years ↑, Years three through five extend well past any company guidance ↓
Evidence for
- Management raised full-year 2026 revenue guidance for the third time this year to approximately $12.6 billion, representing about 40% growth.[Arista Q2 2026 earnings call transcript]· primary
- Reported first-half 2026 revenue of $5.745 billion is 36.4% above the $4.210 billion Arista reported in the first half of 2025, confirming acceleration rather than a one-quarter spike.[Arista Q2 2026 earnings release (SEC 8-K Ex-99.1)]· primary
- 1.6-terabit products are in trials through the second half of 2026 with production deployment expected in 2027, providing an identified product catalyst in the middle forecast years.[Arista Q2 2026 earnings call transcript]· primary
Evidence against
- Management said the initial 1.6T trial customer base would be single-digit in count, so the 2027 ramp depends on a very small number of very large buyers.[Arista Q2 2026 earnings call transcript]· primary
- Arista's own history shows growth is not smoothly decaying: it fell to 12.1% in 2019 and -3.9% in 2020 before rebounding to 48.6% in 2022, arguing against any tidy glide path.[Arista reported annual revenue history]· primary
Operating margin42.0%high
How derived: The four quarters through Q2 2026 averaged roughly 43% reported operating margin and the latest quarter hit 45.4%, but this case holds steady-state margin slightly below the trailing level at 42% because management's ~63% gross-margin guide implies continued mix shift toward large cloud and AI deals, offset but not fully overcome by operating-expense leverage on a much larger revenue base.
Why this confidence: Eight quarters of reported operating margin within a ~4-point band ↑, Explicit company margin and gross-margin guidance for the current year ↑, Assumption sits inside the observed historical range rather than extrapolating beyond it ↑, Mix shift toward large AI deals could compress gross margin further than guided ↓
Evidence for
- Reported operating margin has held in a narrow 41.5%-45.4% band across the last eight disclosed quarters, indicating a stable and predictable margin structure.[Arista quarterly reported operating margins, Q3 2024 - Q2 2026]· primary
- Management raised full-year 2026 operating margin guidance to 48-49% on a non-GAAP basis, above the prior year's level.[Arista Q2 2026 press release]· primary
Evidence against
- Q3 2026 gross margin is guided to about 63%, below Arista's historical mid-60s range, showing the cost of winning large AI fabric deals.[Arista Q2 2026 earnings call transcript]· primary
- Broadcom-enabled white-box competition creates price pressure in the hyperscale data-center switch segment that generates most of Arista's incremental revenue.[AI networking competitive landscape 2026]· secondary
Tax rate21.5%high
How derived: Arista has explicitly guided to a structural tax rate of about 21.5%, described as its usual historical rate, and this case adopts that figure directly because the US federal statutory rate of 21% plus state taxes, net of FDII and R&D credits, has produced a stable rate for the company over several years.
Why this confidence: Company states an explicit structural tax rate figure ↑, US statutory rate has been stable at 21% since 2018 ↑, Stock-compensation windfalls introduce year-to-year noise around the structural rate ↓
Evidence for
- Arista guided to a structural tax rate of 21.5%, characterizing it as a return to the usual historical rate.[Arista FY2025 fourth-quarter and year-end results]· primary
Evidence against
- Arista changed its non-GAAP tax methodology in Q4 2025 regarding discrete stock-based-award effects, meaning reported rates can diverge from the 21.5% structural rate in any given period.[Arista FY2025 fourth-quarter and year-end results]· primary
Reinvestment rate28.0%medium
How derived: Because Arista outsources all manufacturing and its invested capital is dominated by inventory, supply prepayments and R&D rather than plant, growth is cheap to fund; at an average of roughly 18% annual revenue growth in this case, reinvesting about 28% of after-tax operating profit is enough to add the working capital and engineering capacity required, consistent with the company having grown revenue 28.6% in 2025 while remaining strongly cash-generative.
Why this confidence: Asset-light model and debt-free balance sheet are directly disclosed ↑, Reinvestment is tied to this case's own growth path for internal consistency ↑, Company gives no forward capital-expenditure guidance ↓, Inventory and purchase commitments swing materially quarter to quarter ↓
Evidence for
- Arista relies on contract manufacturers and does not own semiconductor fabrication facilities, keeping fixed capital investment low relative to revenue.[Arista FY2024 Form 10-K, manufacturing]· primary
- Arista carried $2.29 billion of cash and investments as of Q2 2026 with no reported debt, indicating growth has been self-funded from operations.[Arista Q2 2026 balance sheet, earnings release]· primary
Evidence against
- Scaling to a 1.6-terabit product generation and pre-building inventory against long component lead times can raise capital intensity above Arista's historical norm.[Arista Q2 2026 earnings call transcript (1.6T trials, 2027 production)]· primary
Terminal growth3.0%high
How derived: The 4.68% 10-year Treasury yield caps a defensible perpetual nominal growth rate, and this case sets terminal growth at 3% — roughly long-run nominal GDP — on the view that after five years of AI build-out Arista becomes a large, established data-center networking supplier growing with the broader economy rather than above it.
Why this confidence: Anchored to an objective, citable risk-free rate ceiling ↑, Consistent with standard long-run nominal GDP assumptions ↑, Perpetual growth is inherently unobservable ↓
Evidence for
- The 10-year Treasury yielded about 4.68% on 12 August 2026, so a 3% perpetual rate sits safely below the risk-free ceiling required for a convergent terminal value.[US 10-Year Treasury Note Yield]· primary
- Arista's revenue base will be roughly $24 billion by the end of the forecast in this case, a scale at which above-GDP perpetual growth is not sustainable.[Arista reported revenue base, Q2 2026 earnings release]· primary
Evidence against
- The AI networking market reached roughly $15.4 billion per quarter growing near 40% year over year in 2026, which some would argue supports a structurally higher long-run rate.[AI networking market sizing, 2026]· secondary
Bull
medium confidence$61.76
IV / share
-68.9% vs $198.82
- Explicit cash flows
- $15.16
- Terminal value
- $46.40
- Net cash
- $0.19
- Intrinsic value / share
- $61.76
75.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
bull revenue growth (avg 25%) runs well above the trailing 4% trend
Revenue growth36.0% → 30.0% → 25.0% → 20.0% → 15.0%medium
How derived: Arista just grew 37.7% year over year and raised guidance three times to ~40% full-year growth, so this case assumes the run-rate barely decelerates in year one (36%) and that the 2027 1.6-terabit production ramp plus a customer base that has widened past 100 AI fabric accounts sustains 20%+ growth through year four, with revenue exceeding $32B by year five as Ethernet consolidates its win over InfiniBand for AI back-end networks.
Why this confidence: Year one is close to the actual current run-rate and guided FY2026 growth ↑, Named product catalyst (1.6T production in 2027) and 100+ AI customers support the mid-years ↑, Requires five consecutive years of 15%+ growth off a $10.5B base, unprecedented for this company ↓, Depends on AI capital spending by a handful of hyperscalers continuing uninterrupted ↓
Evidence for
- Q2 2026 revenue of $3.036 billion beat the company's own $2.8 billion guidance and grew 37.7% year over year, showing demand running ahead of management's plan.[Arista Q2 2026 earnings release (SEC 8-K Ex-99.1)]· primary
- Arista's AI fabric momentum with Etherlink switches expanded to more than 100 cumulative customers, up from the four or five discussed in 2024, broadening the growth base well beyond two hyperscalers.[Arista Q2 2026 earnings call transcript]· primary
- Arista holds the number-one position in data-center switching, having taken the lead from Cisco as AI spending accelerated.[Arista rides AI past Cisco]· secondary
Evidence against
- Nvidia's Spectrum-X Ethernet photonics switches ship in the second half of 2026 and Nvidia owns the scale-up networking layer Arista does not address until 2027, threatening the share gains this case assumes.[Arista rides AI past Cisco, now Nvidia looms]· secondary
- Arista's own revenue history includes a -3.9% year in 2020 immediately after a multi-year cloud build-out, showing that sustained 20%+ growth for five straight years has no precedent at this company.[Arista reported annual revenue history]· primary
Operating margin46.0%medium
How derived: Reported operating margin rose to 45.4% in Q2 2026 from 44.7% a year earlier and management raised full-year non-GAAP operating margin guidance to 48-49%; this case holds steady-state margin at 46%, slightly above the latest reported quarter, on the view that scaling revenue past $30 billion spreads a largely fixed R&D and sales base while EOS and CloudVision software attach keeps pricing power intact.
Why this confidence: Assumption is only marginally above the most recent reported quarter ↑, Company has raised operating margin guidance this year ↑, Sits above every full-year reported operating margin in the given history ↓, Guided gross margin of ~63% is drifting down, working against further expansion ↓
Evidence for
- Non-GAAP operating margin reached 49.9% in Q2 2026 versus 48.8% a year earlier, and management raised full-year guidance to 48-49%, demonstrating margin expansion is currently under way.[Arista Q2 2026 press release]· primary
- Reported operating margin rose from 41.4% in Q4 2024 to 45.4% in Q2 2026 even as revenue nearly doubled, evidencing real operating leverage.[Arista quarterly reported operating margins]· primary
Evidence against
- Management guided Q3 2026 gross margin to about 63%, below the mid-60s historical level, which limits how far operating margin can expand from mix alone.[Arista Q2 2026 earnings call transcript]· primary
- White-box switches built on Broadcom merchant silicon exert price pressure precisely in the hyperscale segment driving Arista's incremental volume.[AI networking competitive landscape 2026]· secondary
Tax rate21.0%high
How derived: Arista guides to a 21.5% structural rate; this case uses 21% because higher US-sourced export income under FDII and larger R&D credits scale with the stronger revenue and margin path here, but it goes no lower since the 21% federal statutory rate plus state taxes realistically floors the effective rate for a US-domiciled, US-R&D-heavy company.
Why this confidence: Company discloses an explicit structural rate that bounds the estimate ↑, Deviation from guidance is only half a percentage point ↑, Multi-year tax policy risk, including global minimum tax rules, is unpredictable ↓
Evidence for
- Arista's disclosed structural tax rate is 21.5%, so a 21% assumption is a modest half-point improvement rather than an aggressive break from company guidance.[Arista FY2025 fourth-quarter and year-end results]· primary
- Arista's Q4 2025 non-GAAP tax methodology change stopped excluding discrete indirect stock-award effects, which in a rising-share-price scenario tends to lower the reported effective rate.[Arista FY2025 fourth-quarter and year-end results]· primary
Evidence against
- Management characterizes 21.5% as the usual historical rate and has not guided below it, so sustained sub-21.5% taxation is not company-supported.[Arista FY2025 fourth-quarter and year-end results]· primary
Reinvestment rate35.0%medium
How derived: Arista's outsourced manufacturing keeps capital spending near 1% of revenue, but tripling revenue toward $32 billion in this case demands substantially more inventory, component prepayments and R&D headcount for the 1.6-terabit generation, so about 35% of after-tax operating profit is reinvested — higher than the base case precisely because faster growth must be funded, not because the business became less efficient.
Why this confidence: Reinvestment is scaled consistently to this case's own faster growth path ↑, Disclosed asset-light manufacturing model bounds the upper end ↑, No forward capital-expenditure or working-capital guidance from the company ↓, Five-year projection of inventory needs under a supply-constrained AI ramp is highly uncertain ↓
Evidence for
- Arista must fund a 1.6-terabit product generation moving from trials in late 2026 to production in 2027, which requires sustained R&D and inventory investment ahead of revenue.[Arista Q2 2026 earnings call transcript]· primary
- Arista's growth is inventory- and supply-commitment-intensive because it depends on third-party contract manufacturers and long-lead merchant silicon.[Arista FY2024 Form 10-K, manufacturing and purchase commitments]· primary
Evidence against
- Arista funded 28.6% revenue growth in 2025 and 37.7% growth in Q2 2026 while ending the quarter with $2.29 billion in cash and investments and no reported debt, suggesting growth may need less reinvestment than assumed here.[Arista Q2 2026 earnings release (SEC 8-K Ex-99.1)]· primary
Terminal growth3.5%medium
How derived: With the 10-year Treasury at 4.68%, a 3.5% perpetual rate remains below the risk-free ceiling while sitting modestly above long-run nominal GDP, reflecting this case's view that AI-driven data-center networking remains a structurally faster-growing slice of the economy and that Arista's EOS software franchise keeps it compounding above the average firm even in maturity.
Why this confidence: Bounded above by an objective, citable risk-free rate ↑, Sits above long-run nominal GDP, which is hard to justify in perpetuity ↓, Category growth support comes from a secondary industry source ↓
Evidence for
- The AI networking layer grew to roughly a $15.4 billion quarterly market at nearly 40% year-over-year growth in 2026, supporting a structurally above-average long-run growth rate for the category.[AI networking market sizing, 2026]· secondary
- At 4.68%, the 10-year Treasury yield leaves ample headroom above a 3.5% perpetual growth assumption for a convergent terminal value.[US 10-Year Treasury Note Yield]· primary
Evidence against
- No company can grow faster than the economy forever, and Arista's own history includes a negative revenue year in 2020, arguing against a perpetual rate above nominal GDP.[Arista reported annual revenue history]· primary
Valuation robustness
reliability of the estimate, not a stock rating62 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 72% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 20.0% | 0.91 | -57.9% | 1.28B | 303.6% |
| Q1 2025 | 27.6% | 0.48 | 21.6% | 1.28B | -0.0% |
| Q2 2025 | 30.4% | 0.93 | 20.1% | 1.27B | -0.7% |
| Q3 2025 | 27.5% | 0.97 | 6.5% | 1.28B | -0.4% |
| Q1 2026 | 35.1% | 1.29 | 168.4% | 1.27B | -0.4% |
| Q2 2026 | 37.7% | 0.83 | -10.8% | 1.28B | 0.4% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The US 10-year Treasury note yielded 4.68% on 12 August 2026, and this maturity is the standard risk-free proxy for a long-horizon equity discount rate denominated in US dollars.
Published beta for Arista Networks is 1.56, reflecting the stock's higher-than-market volatility as a hyperscaler-capex-levered hardware name, and it is used unadjusted because Arista carries no reported debt so its equity beta equals its asset beta.
Damodaran's forward-looking implied ERP, backed out of current index prices and expected cash flows, was 4.23% over the US Treasury bond rate at the start of 2026, and this forward-looking measure is preferred to a historical average because it is consistent with today's market prices and rate environment.
Arista Networks last traded at $201.75 on 12 August 2026, implying a market capitalization of roughly $258 billion against the 1.276 billion diluted shares in the reported capital structure.
Arista reports no debt and $2.29 billion of cash and investments, so there is no observable borrowing cost; the pre-tax cost of debt is therefore set synthetically at the Aaa corporate bond yield of about 5.3%, roughly 60 basis points over the 4.68% 10-year Treasury, which is the appropriate spread for an unlevered, cash-rich issuer.
Generated 8/12/2026, 1:25:12 PM · pipeline v1.1.0