The networking giant’s shares carry a premium, but a look two years into the future reveals a valuation that is far more ordinary.
Arista Networks (ANET) is at the center of the AI buildout, connecting the powerful processors that train and run new models. Management recently described demand as the “best I’ve ever seen in my Arista tenure.” Yet for many investors, the first glance at the stock stops at the price: on the last twelve months of earnings, Arista trades at a demanding price-to-earnings ratio of about 52.7 times.
Image by Luke Robertson from Pixabay
What Patience Buys You
That headline number, however, isn’t the full story. For a patient holder, the effective price tag shrinks considerably over time as earnings…
