Growth Premium / Competitive Moat — Scenario Model

Current Price

$121

Growth Premium / Competitive Moat Component

$11/sh

Market Implies

80% chance of upside scenarios

10% noMoat probability

Scenario Overview

Scenario	EV	$/sh	Prob	Key Gate
mega bull	$23B	$19	56%	platform lock in
bull	$6B	$5	14%	—
base	$3B	$2	10%	—
bear	$1B	$1	10%	sonic adoption
no moat	$0B	$0	10%	commoditization

Gate Milestones

Growth is gated by milestones. Cost step-changes and capability unlocks are tied to specific milestones.

2027

cloudvision growth

CloudVision management suite reaches $500M+ ARR

Unlocks: Validates software-as-a-service layer on networking hardware

CloudVision provides network-wide telemetry [Arista IR]

2030

subscription model

EOS subscription model reaches 40%+ of premium revenue

Unlocks: Recurring revenue improves visibility and terminal value

Industry trend toward NaaS (Network-as-a-Service)

2033

platform lock in

EOS operational tooling creates deep switching costs

Unlocks: Customers invested in EOS automation, monitoring, and config management

10,000+ customers with deep tooling [10-K FY2025]

2027

sonic adoption

SONiC adoption accelerates in enterprise

Unlocks: Erodes EOS switching cost advantage

SONiC supported by Microsoft, gaining enterprise traction

2028

commoditization

White-box/SONiC reaches critical mass in enterprise

Unlocks: Proprietary OS no longer justifies premium

White-box 30-50% cheaper, SONiC provides EOS-like features for free

Full Year-by-Year Models

Blue = input · Black = computed · Click to expand

Market-Implied Probability Reconciliation

Given these scenario EVs, what probability weights would the market need to assign to produce the current market-implied value of $11/share?

Scenario	Moat Premium EV	Per Share	Implied Prob.	Weighted Contrib.
mega bull	$23B	$19	55.8%	$10
bull	$6B	$5	13.5%	$1
base	$3B	$2	10.2%	$0
bear	$1B	$1	10.2%	$0
no moat	$0B	$0	10.2%	$0
Total			100%	$11/sh

Note: The moat premium captures value from EOS platform switching costs, CloudVision software, and operational tooling that wouldn't exist in a commodity switching business. Enterprise networking, AI Cloud, and net cash contribute separately.

Target contribution: $11/sh. Residual: $0.0/sh.