The stock market was a stellar performer this year, with FTSE 100 offering a total yield of 16.3% and the S&P 500 generating 33% over the past 12 months. However, with uncertainty surrounding the new UK government budget and the new US government, bearish investors are calling for another stock market crash.

Despite the arguments made, the stock market has largely proven resilient to the changing political landscape. In the short term, volatility increased around major political events. But as the market digests and adjusts, these “mini-crashes” often reverse within weeks.

Therefore, personally, I remain optimistic. However, there is no denying that another stock market crash will eventually occur. So let’s assume the worst case scenario and say stock prices are about to go down. What stocks should I buy to capitalize on lower prices?

Double your winnings

When deciding where to invest capital during a market downturn, the first place I start looking is my own portfolio. And one stock I’d love to buy more of at a better price right now is Arista Networks (NYSE:ANET).

Arista is not a household name in most households. But its ethernet switches power data centers around the planet, creating the bandwidth needed for reliable, low-latency network performance.

Over the past decade, management has evolved the business to become a critical part of the global IT infrastructure, disrupting previous industry leaders such as Cisco Systems. And with artificial intelligence driving demand for ultra-fast networking technologies, it’s no surprise that the firm has just launched its Etherlink artificial intelligence (AI) platform to capitalize on this tailwind.

Subsequently, its latest results significantly exceeded expectations, surpassing both income and earnings the forecasts. Delivering better than expected results seems to be a recurring theme for this venture. So it’s no surprise that the stock has skyrocketed more than 700% over the past five years.

Every investment involves risk

Despite systematically stealing market share from Cisco over the past decade, Arista is still battling intense competition. Beyond Cisco, management has Nvidia to defend as well microsoft, which is apparently developing its own proprietary networking hardware for AI. The latter is particularly concerning, as 39% of Arista’s revenue in 2023 came from Microsoft.

Then there’s the matter of valuation, because Arista isn’t cheap. inventories the price-to-sales ratio it currently sits at just 20. And its forward price-to-earnings ratio is closer to 42! In other words, the company’s explosive long-term growth potential appears to have already been baked into the stock price, making it an expensive investment right now, especially given the risk of revenue concentration.

However, if there is a stock market crash and Arista stock goes down, then getting more shares of this great business looks like a problem for my portfolio.