Rebellious Allocations Will Kerwin on Arista Networks (ANET)
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Nov 24, 2025 Will Kerwin, a Senior Equity Analyst at Morningstar specializing in tech, dives into Arista Networks' pivotal role in AI infrastructure. He discusses the company's robust hardware and software portfolio, highlighting its 400-800G evolution to meet surging bandwidth needs. Kerwin explains why hyperscalers favor Arista for its performance and reliability, and analyzes competitive dynamics with Cisco and NVIDIA. He also sheds light on Arista's impressive margins and growth driven by AI, all while praising the exemplary leadership of Jayshree Ullal.
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Backend vs Frontend Networking Roles
- Backend networking connects thousands of GPUs for training; frontend serves inference and user access.
- Arista holds a larger share in the frontend while backend competition includes NVIDIA.
TAM Expanded Rapidly With AI Surge
- Morningstar's TAM and forecasts for AI networking have rapidly expanded as real-world growth outpaced prior models.
- The AI networking market could be far larger than early estimates suggested.
Scale-Up Becomes A New Ethernet Opportunity
- Scale-up (within racks) is becoming Ethernet-capable as AI racks grow denser, creating new opportunities.
- Arista is strong in scale-out today and targets future scale-up adoption around 2027.