There are expensive stocks, and then there are stocks that make me stare at the valuation and wonder whether investors have begun pricing earnings from a quarter that has not yet been invented. Arista Networks belongs firmly in the second category. I understand why the market loves Arista. This is not some barely profitable technology company sprinkling “AI” across its investor presentation like parmesan cheese. Arista is growing rapidly, producing extraordinary margins, generating substantial cash, and selling critical networking equipment to some of the largest technology companies in the world. It is one of the highest-quality businesses associated with the artificial-intelligence infrastructure boom. The problem is that Wall Street knows this. At a closing price of $198.82 on August 14, 2026, Arista Networks—ticker symbol ANET—had a market capitalization of roughly $254 billion. Its trailing price-to-earnings ratio was approximately 62. That valuation does not merely expect Arista ...
Whenever I study Taiwan Semiconductor Manufacturing Company, I feel as though I am examining the industrial equivalent of the person in a group project who quietly completes everyone else’s work while the louder participants argue over the presentation. TSMC does not design the world’s most famous processors. It does not sell smartphones, build artificial-intelligence models, or manufacture graphics cards under its own consumer brand. Instead, it manufactures the advanced chips designed by many of the companies receiving all the attention. Apple dreams up a new processor. Nvidia designs another computational beast capable of making data centers glow like small artificial suns. AMD prepares its next attack on the server market. Qualcomm develops another mobile platform. Broadcom expands its custom silicon business. Then everyone eventually arrives at TSMC’s door carrying blueprints and extremely large purchase orders. That arrangement has made TSMC the dominant pure-play semiconductor f...