The AI Chip Powerhouse Flying Under Wall Street’s Radar

The Overlooked Giant Behind AI’s Rise

As the artificial intelligence revolution accelerates, investors are chasing big names like Nvidia and AMD. But one essential player in the AI tech stack, Arista Networks, remains largely overlooked—despite delivering the high-speed networking gear that connects and powers vast AI data centers. While it’s not currently included in the S&P 500, Arista is posting impressive earnings growth, fueled by surging demand from cloud titans like Microsoft and Meta. With AI workloads pushing network capacity to new heights, Arista’s Ethernet switches are increasingly indispensable to hyperscale infrastructure.

Soaring Demand and Robust Financials

Arista’s revenue grew 54% year over year in 2023, surpassing $5.9 billion and hitting record margins. The surge isn’t just a one-off gain—continued cloud investments and AI-driven workloads indicate sustainable long-term growth. While many chip stocks face cyclical volatility, Arista benefits from steady infrastructure demand and a focus on high-performance Ethernet networking. With a strong balance sheet, zero debt, and disciplined capital reinvestment, it’s becoming one of the most compelling ancillary plays in the AI ecosystem.

Missing From the S&P 500, but Not for Long?

Despite being larger and more profitable than many current S&P 500 constituents, Arista Networks has yet to be included in the flagship index—limiting its exposure among ETF-heavy investors. This exclusion may offer a temporary opportunity for savvy investors, as eventual index inclusion could trigger a wave of institutional buying. In a market where everyone’s looking for the next Nvidia, the next critical player may already be waiting off-stage, powering the backbone of AI’s future.