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ALAB vs. CSCO: Which AI Infrastructure Stock Is a Better Buy?
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Key Takeaways
ALAB is seeing strong demand for Aries, Taurus, and Scorpio products supporting AI infrastructure growth.
Cisco expects more than $3B in hyperscaler AI infrastructure revenue in fiscal 2026.
Cisco's Silicon One systems made up 60% of hyperscaler AI orders, driving strong networking demand.
Astera Labs (ALAB - Free Report) and Cisco Systems (CSCO - Free Report) are major players in the AI infrastructure market. While Astera Labs develops semiconductor-based connectivity solutions tailored for cloud and AI infrastructure, Cisco Systems specializes in high-performance networking, security, and connectivity that enable AI workloads to scale efficiently across enterprise and cloud environments.
According to International Data Corporation (IDC), spending on AI infrastructure is expected to surpass $758 billion by 2029, with 94.3% of the spending allocated to servers equipped with embedded accelerators. IDC expects momentum in AI investment to continue in 2026, driven by strong spending from hyperscalers and cloud service providers. According to Gartner, global AI spending is expected to exceed $2.52 trillion in 2026, up from around $1.76 trillion in 2025, representing roughly 44% year-over-year growth. Both Astera Labs and Cisco Systems are expected to benefit from this rapid growth pace.
So, ALAB or CSCO — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
Astera Labs is benefiting from its robust and diversified product portfolio to address the growing demands of AI infrastructure and connectivity solutions, as well as its expanding partner base. It benefits from strong demand for its PCIe solutions, which have also been a major growth driver.
ALAB’s expanding portfolio has been noteworthy. Astera Labs recently announced that it is expanding its global engineering operations by opening a new advanced R&D design center in Israel, led by semiconductor veteran Guy Azrad, to accelerate the development of next-generation AI connectivity fabrics and address data, network and memory bottlenecks in AI infrastructure.
ALAB is set to expand its footprint in the AI connectivity market, which is projected to grow 10-fold to $25 billion over the next five years. The Scorpio P-Series continues to ramp up, with shipments expected to expand to additional hyperscalers in 2026. Meanwhile, the Scorpio X-Series is anticipated to enter high-volume production in late 2026, further boosting revenues.
Aster Labs is benefiting from strong demand for its Aries, Taurus, and Scorpio product families, all of which are expected to drive growth in the first quarter of 2026. Astera Labs expects first-quarter 2026 revenues between $286 million and $297 million.
The Case for CSCO Stock
Cisco has been integrating AI into its product portfolios across networking, security, collaboration and observability. Strong demand for Cisco’s products in developing AI infrastructure has been a game-changer for the company. In the second quarter of fiscal 2026, AI infrastructure orders from hyperscalers hit $2.1 billion, and Cisco expects more than $3 billion in AI infrastructure revenues from hyperscalers in fiscal 2026.
In the second quarter of fiscal 2026, Cisco’s Silicon One technology has been a key driver, with 60% of hyperscaler AI orders comprising Silicon One-based networking systems. The company also announced the new 102.4 Tbps Silicon One G300 chip optimized for scaled AI deployments, along with advanced air- and liquid-cooled systems. These innovations position Cisco as a leader in high-performance networking solutions tailored for AI workloads.
Cisco is seeing increasing traction among neocloud, sovereign, and enterprise customers, with $350 million in AI orders taken in the second quarter of fiscal 2026 and a growing pipeline of more than $2.5 billion. The company-wide networking product order growth accelerated to more than 20% year over year, driven by customers preparing their networks for AI workloads.
CSCO’s expanding portfolio has been noteworthy. Cisco recently announced a significant expansion of its Secure AI Factory with NVIDIA. This development allows companies to set up secure, high-performance AI infrastructure from data centers to the edge. As a result, businesses can achieve faster, large-scale AI production.
Price Performance and Valuation of ALAB and CSCO
In the trailing six-month period, shares of ALAB have plunged 49.4%, whereas CSCO stock has rallied 14.9%. The outperformance in CSCO stock is driven by a strong AI push and growing security dominance.
The underperformance in ALAB can be attributed to challenging macroeconomic uncertainties and stiff competition in the PCIe retimers market. ALAB also suffered from a shift toward a higher mix of hardware sales, which impacted its profit margins. Increased operating expenses from expanded R&D efforts and recent acquisitions also impacted performance.
ALAB and CSCO Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, ALAB and CSCO shares are currently overvalued, as suggested by a Value Score of D and F, respectively.
In terms of forward 12-month Price/Sales, ALAB shares are trading at 15.22X, higher than CSCO’s 4.93X.
ALAB and CSCO Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & CSCO?
The Zacks Consensus Estimate for ALAB’s 2026 earnings is pegged at $2.39 per share, unchanged over the past 30 days. This indicates a 29.89% increase year over year.
The Zacks’ Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.14 per share, unchanged over the past 30 days. This indicates an 8.66% increase year over year.
While both ALAB and CSCO stand to benefit from the booming AI infrastructure market, Cisco Systems offers greater upside potential with a robust AI-driven portfolio and a significantly higher earnings momentum compared to ALAB.
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.
View the Zacks #1 Rank List
Image: Bigstock
ALAB vs. CSCO: Which AI Infrastructure Stock Is a Better Buy?
Key Takeaways
Astera Labs (ALAB - Free Report) and Cisco Systems (CSCO - Free Report) are major players in the AI infrastructure market. While Astera Labs develops semiconductor-based connectivity solutions tailored for cloud and AI infrastructure, Cisco Systems specializes in high-performance networking, security, and connectivity that enable AI workloads to scale efficiently across enterprise and cloud environments.
According to International Data Corporation (IDC), spending on AI infrastructure is expected to surpass $758 billion by 2029, with 94.3% of the spending allocated to servers equipped with embedded accelerators. IDC expects momentum in AI investment to continue in 2026, driven by strong spending from hyperscalers and cloud service providers. According to Gartner, global AI spending is expected to exceed $2.52 trillion in 2026, up from around $1.76 trillion in 2025, representing roughly 44% year-over-year growth. Both Astera Labs and Cisco Systems are expected to benefit from this rapid growth pace.
So, ALAB or CSCO — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
Astera Labs is benefiting from its robust and diversified product portfolio to address the growing demands of AI infrastructure and connectivity solutions, as well as its expanding partner base. It benefits from strong demand for its PCIe solutions, which have also been a major growth driver.
ALAB’s expanding portfolio has been noteworthy. Astera Labs recently announced that it is expanding its global engineering operations by opening a new advanced R&D design center in Israel, led by semiconductor veteran Guy Azrad, to accelerate the development of next-generation AI connectivity fabrics and address data, network and memory bottlenecks in AI infrastructure.
ALAB is set to expand its footprint in the AI connectivity market, which is projected to grow 10-fold to $25 billion over the next five years. The Scorpio P-Series continues to ramp up, with shipments expected to expand to additional hyperscalers in 2026. Meanwhile, the Scorpio X-Series is anticipated to enter high-volume production in late 2026, further boosting revenues.
Aster Labs is benefiting from strong demand for its Aries, Taurus, and Scorpio product families, all of which are expected to drive growth in the first quarter of 2026. Astera Labs expects first-quarter 2026 revenues between $286 million and $297 million.
The Case for CSCO Stock
Cisco has been integrating AI into its product portfolios across networking, security, collaboration and observability. Strong demand for Cisco’s products in developing AI infrastructure has been a game-changer for the company. In the second quarter of fiscal 2026, AI infrastructure orders from hyperscalers hit $2.1 billion, and Cisco expects more than $3 billion in AI infrastructure revenues from hyperscalers in fiscal 2026.
In the second quarter of fiscal 2026, Cisco’s Silicon One technology has been a key driver, with 60% of hyperscaler AI orders comprising Silicon One-based networking systems. The company also announced the new 102.4 Tbps Silicon One G300 chip optimized for scaled AI deployments, along with advanced air- and liquid-cooled systems. These innovations position Cisco as a leader in high-performance networking solutions tailored for AI workloads.
Cisco is seeing increasing traction among neocloud, sovereign, and enterprise customers, with $350 million in AI orders taken in the second quarter of fiscal 2026 and a growing pipeline of more than $2.5 billion. The company-wide networking product order growth accelerated to more than 20% year over year, driven by customers preparing their networks for AI workloads.
CSCO’s expanding portfolio has been noteworthy. Cisco recently announced a significant expansion of its Secure AI Factory with NVIDIA. This development allows companies to set up secure, high-performance AI infrastructure from data centers to the edge. As a result, businesses can achieve faster, large-scale AI production.
Price Performance and Valuation of ALAB and CSCO
In the trailing six-month period, shares of ALAB have plunged 49.4%, whereas CSCO stock has rallied 14.9%. The outperformance in CSCO stock is driven by a strong AI push and growing security dominance.
The underperformance in ALAB can be attributed to challenging macroeconomic uncertainties and stiff competition in the PCIe retimers market. ALAB also suffered from a shift toward a higher mix of hardware sales, which impacted its profit margins. Increased operating expenses from expanded R&D efforts and recent acquisitions also impacted performance.
ALAB and CSCO Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, ALAB and CSCO shares are currently overvalued, as suggested by a Value Score of D and F, respectively.
In terms of forward 12-month Price/Sales, ALAB shares are trading at 15.22X, higher than CSCO’s 4.93X.
ALAB and CSCO Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & CSCO?
The Zacks Consensus Estimate for ALAB’s 2026 earnings is pegged at $2.39 per share, unchanged over the past 30 days. This indicates a 29.89% increase year over year.
Astera Labs, Inc. Price and Consensus
Astera Labs, Inc. price-consensus-chart | Astera Labs, Inc. Quote
The Zacks’ Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.14 per share, unchanged over the past 30 days. This indicates an 8.66% increase year over year.
Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote
Conclusion
While both ALAB and CSCO stand to benefit from the booming AI infrastructure market, Cisco Systems offers greater upside potential with a robust AI-driven portfolio and a significantly higher earnings momentum compared to ALAB.
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, Cisco Systems carries a Zacks Rank #2 (Buy), making the stock a stronger pick than ALAB, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.