Prediction: This AI Infrastructure Stock Could Hit a $500 Billion Valuation by 2032

• Arista Networks benefits greatly from AI-related request for networking solutions, starring to the stock's caller terms surge.

• If the networking instrumentality institution tin prolong 20% annualized maturation implicit the adjacent six years, the banal should support rising.

• Arista Networks' marketplace headdress could deed $500 billion, though the institution whitethorn request much than conscionable beardown integrated maturation to scope this valuation milestone.

• 10 stocks we similar amended than Arista Networks ›

There are galore ways for idiosyncratic investors to capitalize connected the maturation inclination successful generative artificial quality (AI). You tin bargain shares successful apical "Magnificent Seven" stocks with precocious vulnerability to the trend, including Nvidia, Microsoft, and Alphabet.

You could besides bargain immoderate different large hardware- and software-related tech stocks, specified arsenic Advanced Micro Devices, Oracle, and Broadcom. However, beyond these well-known members of large tech, determination are besides different stocks that, portion attracting acold little attention, person beardown maturation imaginable acknowledgment to this trend.

A premier illustration is Arista Networks (NYSE: ANET). A apical supplier of unreality networking solutions for end-users specified arsenic AI information centers, the institution has already benefited greatly from this trend. Already a beardown performer implicit the past 5 years, its shares whitethorn beryllium successful for further outsized terms appreciation successful the years ahead, arsenic the AI maturation inclination persists.

Arista Networks has been successful concern for implicit 20 years, becoming a billion-dollar concern astir 10 years ago. Still, it's lone been implicit the past 3 years that the institution experienced a sustained maturation resurgence.

The crushed for this is hardly a mystery. In precocious 2022, ChatGPT launched, sparking the commencement of the genAI maturation trend. Soon after, tech companies, particularly the largest names successful the space, began to deploy hundreds of billions of dollars into gathering retired their AI infrastructures.

With this booming surge successful demand, it's nary astonishment that Arista Networks has benefited from a large leap successful request for networking hardware, similar switches and routers, arsenic good arsenic the bundle utilized to powerfulness them. In presumption of gross and earnings, this catalyst has had a worldly impact. Back successful 2022, the company's annualized gross was coming successful astatine astir $4.4 billion. Over the trailing-12-month (TTM) period, gross has travel successful astatine astir $8.5 billion.

This accelerated gross maturation has brought with it a correspondingly precocious complaint of net growth. During the calendar twelvemonth ending Dec. 31, 2022, Arista reported diluted net per stock (EPS) of conscionable implicit $1. Over the past 12 months, diluted EPS has travel successful astatine astir $2.63, a astir 150% increase. In turn, this accelerated top- and bottom-line maturation has enabled the banal to rally by astir 267%, jumping from astir $35 per stock to astir $129 per stock today.