At about $170.68 a share, Arista Networks (ANET) is trading near its 52-week high, fueled by a surge in demand for AI networking infrastructure. The world’s largest tech companies, including hyperscalers such as Microsoft (MSFT) and Meta Platforms (META), are spending hundreds of billions of dollars to build AI data centers. Arista’s high-speed Ethernet switches and routers provide the networking fabric that enables massive clusters of AI GPUs to communicate efficiently at scale. The company recently beat expectations and raised its 2026 revenue outlook to approximately $11.25 billion, representing 25% growth. Management also more than doubled its AI networking revenue target from $1.5 billion to $3.25 billion.
Do you think ANET stock is a good long-term bet at current levels? What about at a 40% discount at about $100 per share? If you think that is a steal and have some cash ready to go, here is a trade.
12% annualized yield at 40% margin of safety by selling put options.
- Sell a long-dated Put option expiring 6/17/2027, with a strike price of $100
- Collect roughly $860 in premium per contract (each contract represents 100 shares)
- That’s about 8.2% annualized yield on the $10,000 you’re setting aside for the possibility of buying the stock
- This cash parked in a savings or money market account will earn an extra 4.0%, taking total yield to 12.2%
- And you give yourself a chance to buy ANET stock at deep discounted price of $100
Possible Trade Outcomes: You Win Either Way
Stock Price Outcome: What It Means For You
If ANET stays above $100 you keep the full $860 premium – which is 8.6% extra income over the next 381 days on cash that might otherwise earn you 4.0% or less. You never buy the stock and simply walk away with the cash.
If ANET closes below $100, you’ll be obligated to buy 100 shares at $100. But thanks to the $860 premium, your effective cost basis is just $91.40 per share – a roughly 46% discount from the current level.
Importantly, you wouldn’t be buying a speculative AI startup. Arista is a highly profitable networking leader with a strong balance sheet, substantial cash reserves, and a growing stream of recurring software revenue. The company sits at the center of one of the largest infrastructure build-outs in technology history, supplying the networking backbone that connects AI compute clusters inside modern data centers.
But to hold this trade with conviction, you want to better understand what’s going well for ANET stock and how low it has fallen in the past.
Complementing Your Active Trades
Executing a cash-secured put on ANET is a highly efficient way to engineer yield and optimize your entry point. It is a sophisticated play for active investors. But sustainable wealth building also requires a passive, structured engine.
For investors looking to complement their active trades with a hands-off compounding vehicle, the Trefis High Quality (HQ) Portfolio is the solution. It is engineered to capture market upside across 30 high-conviction stocks and has delivered over 105% in cumulative return since inception.
