In a large pot, bring salted water to a boil. Add the halved baby potatoes and cook until tender, about 15-20 minutes. Drain and let cool.

In a blender, combine arugula, parmesan cheese, pine nuts, garlic, lemon juice, salt, and pepper. Blend while slowly adding olive oil until smooth.

In a large mixing bowl, combine the cooled potatoes, cherry tomatoes, red onion, and basil. Add the arugula pesto and gently toss to coat.

Serve immediately or refrigerate for 30 minutes to allow flavors to meld.