Artificial intelligence (AI) is driving an unprecedented expansion of data center infrastructure. As companies deploy larger, more powerful AI models, demand for processors and high-speed networking hardware that connects them is also soaring. In fact, the global data center networking market is estimated to grow from about $39.5 billion in 2025 to more than $93 billion by 2032.
Image source: Getty Images.
In this environment, companies supplying switches, interconnect chips, and networking platforms, such as Broadcom (AVGO 1.21%) and Arista Networks (ANET 1.43%), could see strong demand. Here's why these two AI networking stocks appear to have a solid upside heading into 2026.
Broadcom
Broadcom has emerged as a major supplier of the networking technology, including switches and high-speed interconnect chips, that connect thousands of processors inside modern AI data centers. While graphics processing units (GPUs) and custom accelerators perform the computing, those chips rely on networking hardware to constantly exchange large volumes of data.
The company's recent financial results have been impressive. In the first quarter of fiscal 2026 (ending Feb. 1, 2026), Broadcom's AI revenue rose 106% year over year to $8.4 billion. AI networking accounted for about one-third of that total and grew 60% year over year.
Management now expects AI revenues to reach roughly $10.7 billion in the second quarter. Networking is expected to become an even larger contributor, accounting for nearly 40% of AI revenue.
NASDAQ: AVGO
Key Data Points
Additionally, CEO Hock Tan has guided for over $100 billion in AI chip revenues, including both accelerators and networking chips, for 2027. This revenue visibility is supported by multiyear partnerships with six major AI customers and secured supply capacity through 2028. If AI networking continues to account for a 33% to 40% share, it will translate into AI networking revenues of $33 billion to $40 billion around 2027.
Broadcom's Tomahawk 6 switch, used to connect clusters of processors inside a data center, is already witnessing solid demand. The company is also seeing strong adoption of its 200-gigabit SerDes, a chip technology that enables extremely high-speed data transmission between processors and networking equipment. The company expects to continue to dominate the AI networking landscape with Tomahawk 7, which has 2x the performance of Tomahawk 6, and is scheduled for launch in 2027.
Wall Street sees a healthy upside potential in the stock in 2026 as the company continues to strengthen its position in the AI infrastructure market. The consensus price target is $470, implying an upside of 37.6% from its last closing price (as of March 11, 2026). However, research firm Baird has set the most bullish target price at $630, implying an upside of 84.4% from the last closing price.
Hence, with AI data center spending rising and networking remaining a critical part of AI infrastructure, Broadcom seems well positioned to deliver impressive returns in 2026.
Arista Networks
Arista Networks is another prominent player in the rapidly growing AI networking market. The company supplies high-performance Ethernet switches and software platforms used in large data centers to connect servers, storage systems, and AI accelerators.
Arista's recent financial results highlight its strong momentum. The company's fiscal 2025 revenues (ending Dec. 31, 2025) were around $9 billion, up 28.6% year over year. Management expects the company's fiscal 2026 revenues to be around $11.25 billion, implying 25% year-over-year growth. AI networking is proving to be one of the prominent catalysts driving the company's growth. The company has increased its fiscal 2026 AI networking revenue target to $3.25 billion, up from its prior estimate of $2.75 billion.
Arista is currently working with four major AI customers, three of which have each deployed nearly 100,000 GPUs cumulatively. While the fourth customer is migrating from Nvidia's InfiniBand networking technology to Arista's Ethernet technology, the company expects the client to reach the 100,000 GPU deployment mark in 2026. In addition to cloud service providers, Arista is also seeing networking demand from AI model builders and neocloud platforms (the smaller cloud companies that rent computing power for AI workloads).
NYSE: ANET
Key Data Points
Arista's networking portfolio involves AI and data center optimized Ethernet switches operating at speeds ranging from 10 gigabits per second to 800 gigabits per second. These metrics refer to how fast data can move through a network. The industry is also preparing for the next upgrade cycle toward 1.6-terabit networking platforms, which will allow even faster communication between servers and processors inside large data centers. The company saw over 100 customers adopting 800-gigabit Ethernet systems in 2025.
Wall Street also sees a meaningful upside potential in the stock as demand for AI networking infrastructure continues to grow. The consensus analyst target price is $177, implying 30.2% upside from the last closing price.
If AI infrastructure spending continues to accelerate and the open-standards Ethernet-based networking becomes the preferred architecture for large AI clusters, Arista may see even more share price gains in 2026.
