We value ANET at $136, or a ~41x P/E based on our FY26 EPS estimate. Our target multiple is in line with current valuation but at a premium to the stock's 3-year median valuation, reflecting rising market multiples and the company's growing share of the AI back-end market.

Downside risks to our target price include: 1) weaker sales due to lower spend by, or the loss of, one of Arista’s two top cloud customers; 2) share losses from competition data center switch vendors; 3) lower gross margins due to protracted supply chain disruptions and elevated logistics costs; and 4) a slower economic environment.