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ALAB vs. AVGO: Which AI Infrastructure Stock Is the Better Buy Now?
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Key Takeaways
ALAB is seeing strong demand for PCIe 6, Ethernet, and fabric switches across AI infrastructure builds.
ALAB expects UA Link and custom connectivity solutions to unlock new growth in next-gen AI systems.
AVGO is benefiting from booming AI networking demand and a $73B AI-related order backlog.
Astera Lab (ALAB - Free Report) and Broadcom (AVGO - Free Report) are major players in the AI infrastructure market, specifically in high-speed connectivity solutions like PCIe and CXL retimers and switches. While Astera Labs focuses on PCIe 6, CXL, and Ethernet products, Broadcom has established itself as a long-standing leader in PCIe switches and infrastructure software.
Per the Mordor Intelligence report, the AI Infrastructure Market is estimated to be worth $87.60 billion in 2025. It is expected to grow to $197.64 billion by 2030, at a CAGR of 17.71% during the forecast period from 2025 to 2030. Both ALAB and AVGO are expected to benefit from this rapid growth pace.
So, ALAB or AVGO — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
Astera Lab is benefiting from the broad-based demand across its product lines, including Scorpio P-Series fabric switches, Aries PCIe 6 retimers, and Taurus Ethernet smart cable modules. Aries PCIe 6 solutions contributed more than 20% of third-quarter revenues, highlighting ALAB’s leadership in the PCIe 6 retimer market.
Astera Labs is rapidly expanding its portfolio to address the growing demands of AI infrastructure and connectivity solutions. The company recently announced plans to deliver custom connectivity solutions leveraging its COSMOS architecture and new photonic chiplet capabilities to support hyperscalers building NVLink-enabled, heterogeneous AI infrastructure.
UA Link offers a significant growth opportunity for Astera Labs. UA Link combines the memory semantics of PCIe with the high speed of Ethernet, but is devoid of the software complexity and performance limitations inherent to Ethernet. ALAB expects to deliver UA Link solutions in 2026 to solve scale-up connectivity challenges for next-generation AI infrastructure. The growing proliferation of UA Link is expected to be a multibillion-dollar additional market opportunity for Astera Labs by 2029.
Astera Labs also benefits from a rich partner base that includes top companies such as Microsoft, NVIDIA, Advanced Micro Devices, Micron Technology, and Intel.
The Case for AVGO Stock
Broadcom is expanding its footprint in the PCIe retimers market by developing advanced solutions that enhance signal quality and extend the reach of PCIe connections in high-speed data environments. The company’s launch of PCIe Gen 6 portfolio, featuring high-port switches and retimers tested for interoperability with partners like Micron and Teledyne LeCroy, is a noteworthy development.
The company is benefiting from strong demand for its networking products and custom AI accelerators. Broadcom’s AI revenue grew 65% year over year in fiscal 2025, reaching $20 billion. This growth is driven by AI semiconductors and infrastructure software, with AI revenue expected to double year over year to $8.2 billion in the first quarter of fiscal 2026.
Broadcom’s AI networking segment also experienced strong demand, with a $10 billion order backlog for AI switches, including the 102-terabit-per-second Tomahawk 6 switch. The company has secured record orders for DSPs, optical components, and PCI Express switches, all of which contribute to its total AI-related order backlog of $73 billion in the fourth quarter of fiscal 2026. This backlog represents nearly half of Broadcom’s consolidated backlog of $162 billion.
Broadcom’s innovative products are also playing a crucial role in its expansion. In November, the company announced the availability of the Brocade X8 Directors and Brocade G820 56-port switch, the industry’s first 128G Fibre Channel platforms designed for mission-critical workloads and enterprise AI applications.
Price Performance and Valuation of ALAB and AVGO
In the trailing six-month period, ALAB and AVGO’s shares have gained 54.6% and 36.2%, respectively. The outperformance of ALAB stock can be attributed to its robust and diversified product portfolio, as well as its expanding partner base.
Despite AVGO’s strong portfolio, along with an expanding partner base, the company is suffering from a slight decline in gross margin due to a higher AI revenue mix and semiconductor product costs.
ALAB and AVGO Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, ALAB and Broadcom shares are currently overvalued as suggested by a Value Score of F and D, respectively.
In terms of forward 12-month Price/Sales, ALAB shares are trading at 21.11X, higher than Broadcom’s 18.02X.
ALAB and AVGO Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & AVGO?
The Zacks Consensus Estimate for ALAB’s 2025 earnings is currently pegged at $1.78 per share, which has remained unchanged over the past 30 days, indicating a 111.90% year-over-year rise.
The Zacks Consensus Estimate for Broadcom’s 2025 earnings is currently pegged at $9.20 per share, which has increased 1.54% over the past 30 days, indicating a 34.90% year-over-year rise.
While both ALAB and AVGO are well-positioned to capitalize on the booming AI infrastructure market, AVGO offers higher growth potential due to its massive AI backlog, diversified revenue streams, and stronger earnings.
Astera Labs’ strong fundamentals, expanding partnerships, and rising AI demand reinforce its leadership in connectivity solutions. However, challenging macroeconomic uncertainties and stiff competition remain a headwind.
Image: Bigstock
ALAB vs. AVGO: Which AI Infrastructure Stock Is the Better Buy Now?
Key Takeaways
Astera Lab (ALAB - Free Report) and Broadcom (AVGO - Free Report) are major players in the AI infrastructure market, specifically in high-speed connectivity solutions like PCIe and CXL retimers and switches. While Astera Labs focuses on PCIe 6, CXL, and Ethernet products, Broadcom has established itself as a long-standing leader in PCIe switches and infrastructure software.
Per the Mordor Intelligence report, the AI Infrastructure Market is estimated to be worth $87.60 billion in 2025. It is expected to grow to $197.64 billion by 2030, at a CAGR of 17.71% during the forecast period from 2025 to 2030. Both ALAB and AVGO are expected to benefit from this rapid growth pace.
So, ALAB or AVGO — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
Astera Lab is benefiting from the broad-based demand across its product lines, including Scorpio P-Series fabric switches, Aries PCIe 6 retimers, and Taurus Ethernet smart cable modules. Aries PCIe 6 solutions contributed more than 20% of third-quarter revenues, highlighting ALAB’s leadership in the PCIe 6 retimer market.
Astera Labs is rapidly expanding its portfolio to address the growing demands of AI infrastructure and connectivity solutions. The company recently announced plans to deliver custom connectivity solutions leveraging its COSMOS architecture and new photonic chiplet capabilities to support hyperscalers building NVLink-enabled, heterogeneous AI infrastructure.
UA Link offers a significant growth opportunity for Astera Labs. UA Link combines the memory semantics of PCIe with the high speed of Ethernet, but is devoid of the software complexity and performance limitations inherent to Ethernet. ALAB expects to deliver UA Link solutions in 2026 to solve scale-up connectivity challenges for next-generation AI infrastructure. The growing proliferation of UA Link is expected to be a multibillion-dollar additional market opportunity for Astera Labs by 2029.
Astera Labs also benefits from a rich partner base that includes top companies such as Microsoft, NVIDIA, Advanced Micro Devices, Micron Technology, and Intel.
The Case for AVGO Stock
Broadcom is expanding its footprint in the PCIe retimers market by developing advanced solutions that enhance signal quality and extend the reach of PCIe connections in high-speed data environments. The company’s launch of PCIe Gen 6 portfolio, featuring high-port switches and retimers tested for interoperability with partners like Micron and Teledyne LeCroy, is a noteworthy development.
The company is benefiting from strong demand for its networking products and custom AI accelerators. Broadcom’s AI revenue grew 65% year over year in fiscal 2025, reaching $20 billion. This growth is driven by AI semiconductors and infrastructure software, with AI revenue expected to double year over year to $8.2 billion in the first quarter of fiscal 2026.
Broadcom’s AI networking segment also experienced strong demand, with a $10 billion order backlog for AI switches, including the 102-terabit-per-second Tomahawk 6 switch. The company has secured record orders for DSPs, optical components, and PCI Express switches, all of which contribute to its total AI-related order backlog of $73 billion in the fourth quarter of fiscal 2026. This backlog represents nearly half of Broadcom’s consolidated backlog of $162 billion.
Broadcom’s innovative products are also playing a crucial role in its expansion. In November, the company announced the availability of the Brocade X8 Directors and Brocade G820 56-port switch, the industry’s first 128G Fibre Channel platforms designed for mission-critical workloads and enterprise AI applications.
Price Performance and Valuation of ALAB and AVGO
In the trailing six-month period, ALAB and AVGO’s shares have gained 54.6% and 36.2%, respectively. The outperformance of ALAB stock can be attributed to its robust and diversified product portfolio, as well as its expanding partner base.
Despite AVGO’s strong portfolio, along with an expanding partner base, the company is suffering from a slight decline in gross margin due to a higher AI revenue mix and semiconductor product costs.
ALAB and AVGO Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, ALAB and Broadcom shares are currently overvalued as suggested by a Value Score of F and D, respectively.
In terms of forward 12-month Price/Sales, ALAB shares are trading at 21.11X, higher than Broadcom’s 18.02X.
ALAB and AVGO Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & AVGO?
The Zacks Consensus Estimate for ALAB’s 2025 earnings is currently pegged at $1.78 per share, which has remained unchanged over the past 30 days, indicating a 111.90% year-over-year rise.
Astera Labs, Inc. Price and Consensus
Astera Labs, Inc. price-consensus-chart | Astera Labs, Inc. Quote
The Zacks Consensus Estimate for Broadcom’s 2025 earnings is currently pegged at $9.20 per share, which has increased 1.54% over the past 30 days, indicating a 34.90% year-over-year rise.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
Conclusion
While both ALAB and AVGO are well-positioned to capitalize on the booming AI infrastructure market, AVGO offers higher growth potential due to its massive AI backlog, diversified revenue streams, and stronger earnings.
Astera Labs’ strong fundamentals, expanding partnerships, and rising AI demand reinforce its leadership in connectivity solutions. However, challenging macroeconomic uncertainties and stiff competition remain a headwind.
Currently, Broadcom carries a Zacks Rank #2 (Buy), making the stock a stronger pick than Astera Lab, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.