prediction

The XRP (XRP 0.10%) cryptocurrency was created by a company called Ripple. It was designed as a bridge currency for the Ripple Payments network, which helps global banks send money across borders instantly, and with negligible costs.

Ripple was locked in a brutal five-year legal battle with the U.S. Securities and Exchange Commission (SEC), until the regulator dropped the case in August as part of President Donald Trump’s pro-crypto agenda. This was a key reason XRP recently reached the highest price since 2018, and many investors are betting on further upside.

However, XRP is still dealing with a few other hurdles, which could keep a lid on additional gains from here. In fact, history suggests that the token might be heading significantly lower instead. Here’s where I predict it will be five years from now.

Image source: Getty Images.

XRP’s latest rally was fueled by regulatory relief

The world’s largest cryptocurrency, Bitcoin, is fully decentralized, meaning it can’t be controlled by any person, company, or government. There will only ever be 21 million Bitcoin in circulation, and nobody can alter that number. XRP doesn’t share those attributes.

XRP has a total supply of 100 billion tokens, with 59.8 billion currently in circulation. Ripple controls the rest and gradually releases them as necessary to meet demand, which is what caught the attention of the SEC. The regulator sued Ripple in 2020, arguing that XRP should be classified as a financial security, just like shares and bonds which are also issued by companies.

This would have placed Ripple under a strict regulatory framework, potentially hampering its business model, so it’s no surprise that the lawsuit depressed XRP’s price for years.

However, a judge issued a ruling in August 2024 that favored Ripple. The SEC appealed the decision, but its plans changed when Trump took office earlier this year and appointed crypto-advocate Paul Atkins to run the agency. Under Atkins’ leadership, the SEC dropped its appeal against Ripple last month, putting an official end to the five-year battle.

Although the response from investors was positive, friendly regulation alone might not be enough to carry XRP higher over the long term.

XRP could be heading for another 90% collapse during the next five years

XRP plummeted by as much as 92% within a year after hitting its previous record high in January 2018. Five years later, in January 2023, it was still down by 90%. The token has already declined by more than 20% from its more recent peak, and I predict further downside is on the way.

Banks don’t have to use XRP to benefit from instant cross-border transactions through Ripple Payments, because the network also supports fiat currencies. Therefore, the network’s success won’t necessarily translate to a higher value for XRP over the long term.

Ripple also launched its own stablecoin called Ripple USD (RLUSD 0.02%) at the end of 2024. Since it’s pegged to the value of the U.S. dollar, it offers a new way to send money through Ripple Payments with practically zero volatility. The value of XRP can fluctuate significantly from day to day, so Ripple USD might be a better option for risk-averse banks, even if their holding periods are very brief.

Since stablecoins are fully backed by safe assets like cash and Treasury bonds, they tend to get preferential treatment from regulators compared to traditional cryptocurrencies. In fact, the U.S. government passed the Genius Act in June, which governs the use of stablecoins in the financial system. Clear rules typically give banks and consumers more confidence to adopt new financial technologies, especially when substantial amounts of money are at stake.

Finally, as I mentioned earlier, the SEC’s lawsuit against Ripple suppressed the price of XRP after 2020. In other words, the token’s value is influenced by the issues facing its parent company, which is a pitfall of centralized cryptocurrencies. There is no guarantee that the U.S. government will maintain its crypto-friendly approach when the next administration takes office in 2028, which is a lingering risk for investors.

As a result, I predict that XRP will be substantially lower in five years. It might even decline by 90% from its recent peak, the same way it was down by 90% five years after setting its 2018 record high. That would translate to a price per token of just $0.36.

Everyone wants to invest in Nvidia. The computer chip giant now has a market cap of over $4 trillion, making it the largest company in the world. Other technology giants have been left in the dust, trailing the performance of Nvidia shares.

One underrated stock at the moment is Amazon (AMZN -3.07%). Over the last five years, Amazon’s stock is up just 57% compared to Nvidia’s 1,350% gain, with the former’s performance actually trailing the broad market indices such as the S&P 500, which is up 101%. This means this narrative may flip through 2030.

Here’s why investors are underrating Amazon as an artificial intelligence (AI) stock, and why it could be worth more than Nvidia five years from now in 2030.

An AI beneficiary, competing with Nvidia

Amazon is not thought of as a huge AI beneficiary. Or, at least, it doesn’t come to mind first when you think of AI stocks. The company’s cloud computing division — Amazon Web Services (AWS) — is growing slower than the competition from Alphabet and Microsoft. AWS revenue grew 17% year over year last quarter, while Google Cloud and Microsoft Azure both grew over 30%, gaining market share from Amazon.

However, I don’t think AWS should be thought of as an AI loser. It is the largest cloud computing partner of Anthropic, the fast-growing AI start-up. Anthropic has raised over $10 billion in funding for spending on AI workloads, a lot of which will go to AWS.

Anthropic’s revenue is growing rapidly, up from annual recurring revenue (ARR) of $1 billion to start 2025 to $5 billion in August, making it one of the fastest-growing companies in the world. For AWS, this likely means a huge boost in revenue from Anthropic, which will lead to accelerating revenue growth.

On top of a cloud computing partnership, AWS and Anthropic are working closely to build custom computer chips to compete with Nvidia. One of the largest costs to Amazon’s business is buying computer chips from Nvidia. To cut down on these costs, it is building its own line of chips called Trainium, which will be used to train and run Anthropic’s AI tools. This will not only hurt Nvidia’s sales if scaled up over the next five years, but will save on costs for AWS and lead to rising profitability.

Image source: Getty Images.

Efficiency in e-commerce

An area of Amazon’s business even more underrated when it comes to AI is e-commerce and digital media. Amazon has built up a vertically integrated e-commerce network, hosting its own delivery business, web platform, and fulfillment centers to connect buyers and sellers of online goods. Layered on top are its subscription services and advertising.

All these businesses can be helped with AI tools. For one, Amazon is utilizing AI generative content to help small businesses build advertisements to be played on Amazon’s website and its Prime Video service. Growing advertising revenue as a percentage of Amazon’s overall sales will help increase profit margins.

There are plenty of efficiency gains to be made by utilizing AI and robotics in warehouses, cutting down on the need for workers doing manual labor. Moonshot programs in self-driving could help cut down on costs for the delivery network over the long haul.

Today, Amazon’s North American retail operations (a division that houses everything except AWS) had a profit margin of just 7.5% over the last 12 months. These slim margins will start to reverse due to all the efficiencies and high-margin revenue getting layered into the e-commerce division, combined with solid revenue growth and earnings from e-commerce, which will keep soaring in the years to come.

AMZN EBIT (TTM) data by YCharts

Why Amazon can be larger than Nvidia

Looking at earnings before interest income and taxes (EBIT), Amazon and Nvidia are right around the same level. Nvidia’s EBIT is $96 billion, compared to Amazon’s $77 billion. Both figures have grown quickly over the last five years.

Nvidia won’t go bankrupt in the next five years, but its earnings growth may slow. The AI data center boom has been kind to the company’s profitability, and now competitors such as Amazon are trying to build their own chips. Pricing power may come down, and revenue could slow if the semiconductor market hits a cyclical downturn.

On the other side of the equation, Amazon’s EBIT growth will remain strong over the next five years. Revenue will keep chugging higher — especially when considering the Anthropic partnership — and consolidated profit margins will keep expanding. Amazon’s consolidated revenue was $670 billion over the last 12 months, while EBIT margin was just 11.5%. By 2030, revenue can grow to $1 trillion with a 15% EBIT margin, leading to $150 billion in consolidated earnings power for the business.

I believe that will be larger than Nvidia’s earnings in 2030, leading to Amazon surpassing Nvidia in market capitalization.

Advanced Micro Devices (AMD -0.23%) hasn’t had the best few years. It has been outshined by its rival Nvidia (NVDA 0.34%) in the biggest computing buildout of all time, and there doesn’t appear to be a path where AMD can be a direct competitor with Nvidia. Instead, it’s only viewed as an alternative so customers can push back against Nvidia if it gets too aggressive with pricing.

Furthermore, AI hyperscalers are starting to design their own chips in collaboration with Broadcom, creating another fierce competitor for AMD. Alongside all of that, AMD isn’t completely focused on high-powered graphics processing units (GPUs). It also has an embedded processor division as well as other computing chips used in gaming consoles and PCs.

All of this creates a company that is more diversified than its peers. However, diversification isn’t always a good thing, especially when one division is experiencing a generational growth opportunity.

So, what will AMD’s stock price be by 2030? Let’s take a look.

Image source: Getty Images.

AMD is a more diversified business than Nvidia

AMD splits its business into three primary divisions: data center, client and gaming, and embedded.

Data center isn’t AMD’s largest division by revenue; Client and gaming is by a slim margin. In Q2, data center revenue was $3.24 billion versus client and gaming’s $3.62 billion. However, AMD’s data center divisions were heavily affected by the ban on selling computing hardware to China, which also affected Nvidia.

When comparing Nvidia and AMD’s data center growth, it’s quite heavily favored in one direction. AMD’s data center revenue increased by 14% year over year in Q2, while Nvidia’s rose by 56%. This clearly indicates that AMD is getting smoked by Nvidia, and doesn’t really have a chance to catch up.

Most AI hyperscalers have already built a ton of infrastructure using Nvidia’s technology, and when these GPUs eventually burn out, it would cost a significant amount more to switch over to AMD’s architecture versus staying with Nvidia’s. As a result, AMD is stuck in second place.

To make matters worse for AMD, its embedded and client and gaming divisions do not have significant long-term potential. These are divisions that over the long term won’t grow much more than 10% annually, making them essentially market performers.

This doesn’t bode well for AMD, especially with its already expensive valuation.

AMD’s expensive stock price is holding its long-term potential back

Despite AMD clearly being a second-place company, it’s actually more expensive than its peer.

NVDA PE Ratio (Forward) data by YCharts

AMD’s 41 times forward earnings price tag isn’t cheap, and I’m not sure its growth justifies it. In 2025 and 2026, Wall Street analysts project 28% and 22% revenue growth, respectively. There are plenty of companies that are expected to grow near that level over the next few years that don’t have nearly the premium that AMD does, so this also works against it.

However, that’s not the only way for a company to perform. AMD is also working on improving its margins, something that it has done consistently over the past few years.

AMD Profit Margin data by YCharts

If AMD can improve its margins to 15% by 2030, it could be a winning investment. If AMD trades at a more reasonable valuation of 30 times forward earnings, grows at a 20% pace, and achieves that margin level, it could be worth about $225 per share.

However, that’s only a 40% upside from today’s stock price. I think there are a lot better stocks to invest in than AMD, as it doesn’t have the growth that others in its industry have. Furthermore, if the AI market goes down, it will drag AMD’s stock with it. It may not decline as much as Nvidia’s, but it would still result in hefty losses. There are far better alternatives to invest in than AMD, and I think investors would be better off picking those stocks instead.

The Rams are off to a great start — but now comes the big test.

The defending Super Bowl-champion Philadelphia Eagles, like the Rams, are 2-0.

Sunday’s game at Lincoln Financial Field in Philadelphia will be the Rams’ third opportunity in less than a year to show they can beat a team that ended their 2024 season with a defeat in an NFC divisional-round game.

Rams quarterback Matthew Stafford and a defense that has surrendered only one touchdown helped the Rams to victories over the Houston Texans and the Tennessee Titans.

The Eagles feature running back Saquon Barkley — the reigning NFL offensive player of the year — quarterback Jalen Hurts, one of the NFL’s best offensive lines and a defense led by tackle Jalen Carter. They have defeated the Dallas Cowboys and Kansas City Chiefs.

Barkley rushed for more than 200 yards and scored on two long touchdown runs in each of the Eagles’ victories over the Rams last season.

The Rams added lineman Poona Ford and linebacker Nate Landman in the offseason to improve the run defense.

Rams coach Sean McVay is 1-5 against the Eagles. He will once again scheme against Eagles defensive coordinator Vic Fangio.

“Is this a great challenge? You’re damn right it is,” McVay said, adding, “They’ve gotten after us. They’ve gotten the results that they wanted. You can see it’s a combination of a lot of great things that they have going there. … Let’s go swing and see what happens.”

A couple of former University of Oregon quarterbacks square off Sunday in a pivotal AFC West matchup. It’s Justin Herbert of the Chargers and Bo Nix of the Denver Broncos, both backed by talented defenses.

The Chargers are making their season debut at SoFi Stadium, and they already have two big pelts to hang on the wall. They’ve beaten Kansas City and Las Vegas, and against Denver are looking to sweep their first half of AFC West games. Last season, in the debut of Jim Harbaugh and Sean Payton with their respective teams, the Chargers swept the Broncos.

“Obviously, his success speaks for itself both at the NFL level and college level,” Payton told reporters this week of Harbaugh. “I was excited that he got a job in our league, but not so much in our division.”

How the Chargers can win: Get another strong performance from Herbert. Spread the ball around to exploit soft spots in Denver’s secondary. Put the clamps on a Broncos ground game and in particular former Chargers running back J.K. Dobbins. So far, the Chargers rank eighth in run defense.

How the Broncos can win: Win on early downs so they can avoid third-and-five (or longer) situations. Establish the run to set up the play-action passing game. Finish stronger — Denver has tended to fade late in games. Make the Chargers one-dimensional; they’ve had a hard time establishing the run.

Amazon (AMZN -1.20%) is one of the world’s most recognizable companies. Its e-commerce platform is responsible for delivering billions of dollars worth of goods every year in over 100 countries around the globe, and has led the e-commerce revolution. However, the e-commerce shift has largely played out, and with artificial intelligence (AI) investing dominating the market, it may seem like Amazon stock is out of favor.

But that’s not the case. Amazon is also heavily involved in the AI arms race and has another exciting division that’s driving impressive growth. The combination of a strong base business alongside a couple that are growing rapidly can lead to long-term outperformance, making Amazon an intriguing stock to buy now.

But what kind of growth can Amazon investors expect by 2030? Let’s find out.

Image source: Getty Images.

Two divisions are driving Amazon’s outsize profit growth

Amazon’s commerce divisions are well known, but there is a fact that’s not as widely known: This business isn’t as profitable as one might think. In Q2, Amazon’s North American commerce divisions generated $7.5 billion in operating profit on sales of $100 billion. However, most of that profit likely comes from one unlikely source: digital advertisements.

Amazon’s advertising services divisions have been rapidly growing behind the scenes, and are a large reason why Amazon’s operating profits have improved over the past few years. In Q2, ad services revenue rose 23% year over year, making it the fastest-growing division within Amazon. While Amazon doesn’t break out the individual operating margins per segment, this division likely has impressive margins. Another advertising-focused business, Meta Platforms, has consistently delivered operating profits between 30% and 45% over the last five years. That’s quite a bit higher than Amazon’s divisionwide operating margin of 7.5%, so it’s likely that the faster advertising service growth rate will continue to improve Amazon’s operating profits.

One division where Amazon breaks out the operating margin outside of commerce is Amazon Web Services (AWS), its cloud computing division. AWS is the world’s largest cloud provider, having experienced several years of impressive growth. It’s also benefiting from the AI arms race, as several clients lack the resources to build their own data centers for training and running AI models, so they rent them from AWS.

AWS’ operating margins are significantly better than those of its commerce siblings, as it reported an impressive 33% operating margin. That’s down from Q1’s 39% margin, but it makes sense considering how much money AWS is spending to build out increased computing capacity due to massive demand.

Cloud computing is expected to be a massive growth trend over the next few years, with Grand View Research estimating that the global cloud computing market will expand from $752 billion in 2024 to $2.39 trillion by 2030. That’s massive growth, and shows that AWS will continue to be a strong profit driver for Amazon over the next five years.

With two strong growth trends propelling Amazon’s profits higher, what will Amazon’s stock price be five years from now?

Amazon could be a $500 stock by 2030

In Q2, Amazon’s operating profits increased by 31%. This is a significantly slower rate of growth than it was previously, but with the outsize growth of highly profitable divisions like AWS and its ad services, I believe this is a sustainable growth rate through 2030. To account for some conservatism, we will use a 20% growth rate.

Data by YCharts.

If Amazon can continue growing its operating profits by 20% through 2030, that indicates $210 billion in operating profits by the end of 2030. That’s a 172% increase from today’s levels.

As long as Amazon’s valuation today is reasonable (it’s somewhat pricey at 32 times operating profits), its growth would be similar to its stock price growth. If we project Amazon to trade at 25 times operating profits, that would give the company a $5.3 trillion market cap, or a stock price of $492.

So, even with a lot of conservatism baked in (a lower growth rate than I think is possible and a decreased valuation), Amazon has the potential to be nearly a $500 stock by 2030. That’s more than a double in under six years, making it a great stock to buy now and hold over the next few years.

Fresh off a toppling of Kansas City, the Chargers make their second stop on their whirlwind tour of the AFC West to face another familiar foe.

It’s Jim Harbaugh versus Pete Carroll, a coaching rivalry that began when Harbaugh was at Stanford and Carroll was at USC, and continued with Harbaugh at the San Francisco 49ers and Carroll at the Seattle Seahawks.

“You’d be friends,” Harbaugh said. “You’d be almost like brothers if it wasn’t for being on opposite sidelines. It’s the kind of guy you’d send a Christmas card to, but you don’t, because you’re too busy trying to scratch each other’s eyeballs out. Nature of the business. Dog-eat-dog.”

Like the Chargers, the Raiders opened with a win on the road, a 20-13 victory at New England.

The Las Vegas defense clamped down in that one, allowing the Patriots just 60 yards on the ground and a four-of-14 performance on third downs.

Geno Smith threw for 362 yards in his Raiders debut, and rookie Ashton Jeanty ran for his first NFL touchdown.

Tight end Brock Bowers had five catches for 103 yards before leaving the game with a banged-up knee.

How the Chargers can win: Get to Smith, who was sacked four times in the opener. Don’t allow him the time to complete those deep passes. Get a command performance from that array of receivers who put on a show in Brazil. Let Justin Herbert keep the Raiders’ defense honest by tearing off an off-schedule run or two.

How the Raiders can win: Put the ball in the hands of Bowers, providing he’s back up to full speed. Get a breakout game from Jeanty, who did score against the Patriots but only averaged two yards per carry. Take advantage of a reshuffled Chargers offensive line, something the Chiefs couldn’t do.

One of the hottest stocks this year has been Opendoor (OPEN 4.30%), which is up more than 500% year to date as of this writing. The stock recently shot up nearly 80% in one day after the company announced both a new CEO and that its co-founders were returning to take seats on its board of directors.

However, the stock’s meteoric rise this year is not because of the strength of its business or signs of a turnaround. In fact, the stock saw its share price actually cut in half earlier this year before hedge fund manager Eric Jackson of EMJ Capital started hyping the stock on social media platform X (formerly Twitter) in July, saying it had the potential to be a 100-bagger. Others then piled in, with influential newsletter writer and podcaster Anthony Pompliano also promoting the stock. Essentially, it’s become a meme stock.

With a high short interest and retail investors jumping in, the stock skyrocketed despite poor results.

A struggling business

Opendoor is essentially a company that flips houses. It uses a proprietary algorithm to act as an instant buyer of homes, making all-cash offers to sellers. While the company typically offers somewhat lower amounts than what a home is worth, the allure for sellers is that it’s a quick sale, and they can avoid the hassle of things like house showings and open houses.

The company makes money in two primary ways. The first revenue stream is through flipping the house, where it makes repairs and then sells it at a higher price. It charges a service fee, which it says is akin to a realtor’s commission. It’s also been working to expand its business into a more comprehensive platform, offering services such as mortgage services and title insurance.

The biggest issue with Opendoor’s business model is that the company takes on significant inventory risk. Once it buys a home, it owns the home. These things aren’t cheap. This process exposes Opendoor to losses if a house sits too long, since it has to pay real estate taxes and other costs like utilities. Meanwhile, home prices can also fall. The model can work in a rising price environment, but in a tough real estate environment, it can be challenging.

Profits have been tough to come by for the company, although last quarter it was able to squeeze out its first quarter of EBITDA profitability in three years. Its revenue climbed 4% to $1.6 billion, as it sold 4,299 homes, up 5%.

This is a low-gross-margin business, and gross margins slipped by 30 basis points to 8.2%. It recorded a net loss of $29 million in the quarter, but positive adjusted EBITDA of $23 million.

However, the company offered up a cautious outlook going forward due to what it called a deteriorating housing market. It said consistently high mortgage rates are leading to less buyer demand, resulting in both fewer acquisitions and lower resale volumes. The company only purchased 1,757 homes in the second quarter, which was down 63% versus a year ago.

As a result, it guided for third-quarter revenue of between $800 million to $875 million, and an adjusted EBITDA loss of between $28 million and $21 million. That compares to revenue of $1.4 billion in Q3 last year and an adjusted EBITDA loss of $28 million.

The company has started to lean more into working with real estate agents for business. It’s also introduced a cash plus hybrid product where a seller gets cash upfront, but can receive additional proceeds after the sale.

Image source: Getty Images.

Why the stock is unlikely to be a long-term winner

While Opendoor has had a great run, it’s unlikely to be a long-term winner. It has a capital-intensive business model with slim gross margins. The ability to really scale this business over the long run is difficult, and the company carries significant inventory risk.

After its latest surge, its market cap jumped to $7.7 billion. The company only generated $433 million in gross profits last year and $227 million through the first six months of this year, while projecting a slowdown in the second half.

The company would be smart to use its elevated stock price to issue stock and start stockpiling cash. However, even with that, it is hard to justify its current valuation for a business model that, as currently constructed, just isn’t that attractive.

Bank of America (BAC 0.71%) is one of the largest banks in the world, operating in the U.S. and more than 35 countries worldwide. By market cap, it’s the second-most valuable bank in the world, trailing only JPMorgan Chase. In the past five years, Bank of America has outperformed the S&P 500, with total returns close to 125% in that span, compared to the index’s 112% (through Sept. 12).

Even with Bank of America’s market-beating returns over the past five years, the next five years could continue the same momentum. The reason comes down to one factor: its consumer investment business.

Image source: Getty Images.

The consumer investment business involves standard brokerage accounts, wealth management, and financial advisory services. In the fourth quarter of 2024, Bank of America’s consumer investment assets crossed the $500 billion mark for the first time in the company’s history.

The company noted that this amount has doubled every five years, and it expects to hit $1 trillion in the next five years. In the second quarter of this year, it reached around $540 billion (up 13% year over year).

Hitting this mark won’t guarantee that Bank of America’s stock will soar (nothing guarantees that), but the growth of its consumer investment business means it will earn much more fee-based income and see higher margins than from other revenue sources like traditional lending. This should be a nice boost to Bank of America’s profitability, especially as we anticipate interest rates getting lowered over the next few years, which could impact the bank’s main revenue source.

The benchmark S&P 500 has recovered dramatically from a tariff-driven shock in April 2025, and is now trading close to record highs. “Magnificent Seven” stocks, in particular, have been the key driver of this mid-year rally. Increasing adoption of artificial intelligence (AI) globally, coupled with strong earnings performance, has been fueling investor confidence for these technology giants.

Semiconductor giant Nvidia continues to be the paragon of this ongoing AI boom. However, another company may soon become a Wall Street darling, as it is helping enable GPUs to work together efficiently in large AI clusters. That company is Arista Networks (ANET -8.77%).

Image source: Getty Images.

While most investors have been focusing on AI chips, networking is also equally important. AI training and inference (real-time deployment) workloads demand enormous clusters of GPUs, which can cost tens of thousands of dollars each. However, without fast, low-latency connections between GPUs, both the training of large AI models and inference at scale suffer from slower performance and higher costs. Arista is well positioned to resolve these challenges.

AI data center catalyst

Arista has established itself as a pure-play Ethernet networking company, delivering hardware and software networking solutions for large-scale AI data centers, as well as for campus and routing networks.

Until recently, Ethernet wasn’t considered strong enough for AI workloads. Instead, Nvidia’s InfiniBand technology was the go-to choice for scale-out back-end AI networks, linking racks of servers and accelerators in massive GPU clusters. Even in scale-up back-end AI networks (within a server rack), Nvidia’s proprietary high-bandwidth interconnect technology NVLink is used to connect GPUs for high-performance and low-latency networking. However, that seems to be changing now.

Ultra Ethernet Consortium (UEC) released its first full specification in June 2025, creating an Ethernet-based system designed for AI and high-performance computing (HPC) at scale. Since then, hyperscalers and enterprises have been migrating away from proprietary InfiniBand to open-source Ethernet. Over time, Arista also expects clients to migrate from NVLink to Ethernet/UALink networking in scale-up back-end networks.

Arista stands to benefit dramatically from this transition, as its Ethernet-based Etherlink portfolio (20-plus products launched since 2024), paired with its Extensible Operating System (EOS) operating system, is being increasingly preferred by data centers for scale-out networking.

The company already accounted for nearly 21.3% of the data center Ethernet switch market at the end of the first quarter 2025. As more AI workloads move to Ethernet, Arista is well-positioned to capture an even bigger share of the global data center AI networking market, estimated to be nearly worth $20 billion in 2025.

Customer base

Management is guiding for AI networking revenue to exceed $1.5 billion in 2025. That includes about $750 million from back-end AI networks alone, a dramatic improvement from absolutely nothing in 2022.

A major chunk of this $750 million revenue target is firmly supported by two hyperscaler clients, Microsoft and Meta Platforms, which have deployed 100,000 GPUs in distributed AI clusters. Each of these clients is expected to account for at least 10% of Arista’s revenues in fiscal 2025. The third hyperscaler client is also close to that scale, while the fourth hyperscaler client is on the way. With its sticky hyperscaler customer base, Arista enjoys significant near-term revenue visibility.

Arista is also expanding its customer base beyond hyperscalers. The company now caters to 25 to 30 enterprises and Neocloud customers (new generation of cloud providers) actively deploying AI clusters. While individually smaller than the big four hyperscaler clients, they are helping offset the slowness in ramp-up of the fourth hyperscaler customer and the loss of the fifth sovereign AI customer. The diversified revenue base has also helped reduce Arista’s overreliance on a smaller client base.

Other markets

Besides AI networking, Arista is also strengthening its position in enterprise campus and wide-area network (WAN) segments. The VeoCloud purchase gives Arista an AI-ready WAN portfolio that helps customers connect branch sites securely, while managing traffic flows more efficiently for AI workloads. Arista now expects its campus switching business to add $750 million to $800 million in revenues in fiscal 2025.

What about the valuation?

Arista shares trade at 47.4 times forward earnings, which is not cheap. Additionally, the company also faces competition from technology giants such as Nvidia and Broadcom, as well as from hyperscalers exploring in-house options in the networking space.

But Arista can still see its share price grow despite the high valuation multiples. The company’s software offerings, comprising EOS operating system and CloudVision network management and automation platform built atop EOS, helps improve networking performance. Since GPUs use high amounts of power, the networking software plays a critical role in reducing the overall GPU usage. Arista’s Ethernet also works across different accelerators, giving customers more flexibility.

The data center industry is gradually moving from a network connection speed of 400 gigabits per second of data to 800 gigabits per second of data. With its Ethernet-based networking products, robust software stack, and long-term customer relations, the company can capitalize on this opportunity. Hence, Arista can emerge as a major winner in the AI networking boom in the coming years.

Quarterback Matthew Stafford, the linchpin to the Rams’ aspirations for another Super Bowl appearance, emerged largely unscathed from a season-opening victory over the Houston Texans, but another great challenge awaits the offensive line Sunday against the Tennessee Titans.

Left guard Steve Avila is doubtful because of an ankle injury and right guard Kevin Dotson will be playing through an ankle issue.

Not great news for a group that must contain Titans defensive end Jeffery Simmons.

“He is really disruptive,” Stafford said of Simmons, who sacked Stafford three times in a Rams defeat in 2021, “gets off on the count, physical, fast and plays with a nasty streak.”

To reinforce the line and help establish the rushing attack, coach Sean McVay could deploy multiple tight ends.

The Rams’ defense faces quarterback Cam Ward, the top pick in the NFL draft.

Ward completed 12 of 28 passes for 112 yards in a 20-12 defeat by the Denver Broncos. He was sacked six times.

“He didn’t play bad last week,” Rams edge rusher Byron Young said. “He looked pretty comfortable back there even though he got sacked a few times. He was handling himself pretty well. … He knows what he’s doing. Even though he’s a rookie, he’s definitely somebody you can’t sleep on.”