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ALAB vs. AVGO: Which AI Infrastructure Stock Is the Better Buy Now?
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Key Takeaways
ALAB expanded its Scorpio PCIe-6 switch family and expects broader volume ramps in 2027.
Broadcom's AI semiconductor revenue rose 106% year over year to $8.4 billion in Q1 2026.
AVGO expects more than $100 billion in AI chip revenue by 2027 amid strong XPU demand.
Astera Lab (ALAB - Free Report) and Broadcom (AVGO - Free Report) are major players in the AI infrastructure market, particularly in high-speed connectivity solutions such as 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.
So, ALAB or AVGO — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
ALAB is rapidly expanding its portfolio to address the growing demands of AI infrastructure and connectivity solutions. Its product portfolio, including Scorpio, Aries, and Taurus, has been a key catalyst.
The Scorpio product family, particularly the Scorpio X-Series and P-Series PCIe 6 switches, has seen strong momentum. In the first quarter of 2026, ALAB expanded its market-leading Scorpio P-Series PCIe-6 Fabric Switch family to span 32- to 320-lane configurations, enabling flexible deployment across hyperscale and AI infrastructure environments. The company also enhanced infrastructure fleet management with customer-optimized firmware and COSMOS embedded software, while expecting multi-customer shipments in the second half of 2026 and broader volume ramps in 2027.
The company benefits from strong growth in UALink, an open standard scale-up connectivity protocol designed to address the increasing demands of AI infrastructure. In the first quarter of 2026, ALAB collaborated with UALink Consortium to publish the new UALink 2.0 specification, introducing advanced capabilities such as In-Network Compute, confidential computing, and multi-path routing while preserving its foundational memory-semantic model. These enhancements strengthen scalability, security, and resiliency, further supporting an open, vendor-neutral AI compute fabric designed to meet evolving industry demands.
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 second quarter of 2026. ALAB expects revenues between $355 million and $365 million, implying 15% to 18% sequential growth in the second quarter.
The Case for AVGO Stock
Broadcom is benefiting from the surging demand for AI infrastructure, which is driving significant upside potential for the company. In the fiscal first quarter of 2026, the company reported total revenues of $19.3 billion, up 29% year over year, with AI semiconductor revenue surging 106% to $8.4 billion. This momentum is expected to continue, as Broadcom guides for fiscal second-quarter 2026 AI semiconductor revenues of $10.7 billion, representing 140% year-over-year increase.
The uptick can be attributed to Broadcom's custom AI XPU (accelerator) business, which grew 140% year over year in the fiscal first quarter of 2026. Broadcom collaborates closely with six major customers, which include Google, Anthropic, Meta, and OpenAI, to develop and deploy custom AI accelerators tailored for large language model workloads.
Broadcom’s leadership in AI networking has been noteworthy. The company's Tomahawk 6 switch and 200G SerDes technology are capturing demand from hyperscalers, with AI networking revenue growing 60% year over year in the fiscal first quarter of 2026 and projected to represent 40% of total AI revenues in the fiscal second quarter of 2026.
Broadcom expects to generate more than $100 billion in AI chip revenue by 2027. It has a clear view of customer plans and reliable supply chains. The company is also seeing a shift toward more customized XPUs for specific AI workloads, which enhances its value proposition and deepens customer relationships.
Price Performance and Valuation of ALAB and AVGO
In the year-to-date period, ALAB and AVGO’s shares have gained 39.9% and 22.9%, 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, gross margin in the fiscal second quarter of 2026 is expected to be flat sequentially. High debt level is a headwind.
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 22.61X, higher than Broadcom’s 15.5X.
ALAB and AVGO's Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & AVGO?
The Zacks Consensus Estimate for ALAB’s 2026 earnings is currently pegged at $2.92 per share, which has increased 22% over the past 30 days. This indicates a 58.70% year-over-year rise.
The Zacks Consensus Estimate for Broadcom’s 2026 earnings is currently pegged at $11.45 per share, which has increased by a penny over the past 30 days. This indicates a 67.89% 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.
View the Zacks #1 Rank List
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, particularly in high-speed connectivity solutions such as 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.
So, ALAB or AVGO — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
ALAB is rapidly expanding its portfolio to address the growing demands of AI infrastructure and connectivity solutions. Its product portfolio, including Scorpio, Aries, and Taurus, has been a key catalyst.
The Scorpio product family, particularly the Scorpio X-Series and P-Series PCIe 6 switches, has seen strong momentum. In the first quarter of 2026, ALAB expanded its market-leading Scorpio P-Series PCIe-6 Fabric Switch family to span 32- to 320-lane configurations, enabling flexible deployment across hyperscale and AI infrastructure environments. The company also enhanced infrastructure fleet management with customer-optimized firmware and COSMOS embedded software, while expecting multi-customer shipments in the second half of 2026 and broader volume ramps in 2027.
The company benefits from strong growth in UALink, an open standard scale-up connectivity protocol designed to address the increasing demands of AI infrastructure. In the first quarter of 2026, ALAB collaborated with UALink Consortium to publish the new UALink 2.0 specification, introducing advanced capabilities such as In-Network Compute, confidential computing, and multi-path routing while preserving its foundational memory-semantic model. These enhancements strengthen scalability, security, and resiliency, further supporting an open, vendor-neutral AI compute fabric designed to meet evolving industry demands.
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 second quarter of 2026. ALAB expects revenues between $355 million and $365 million, implying 15% to 18% sequential growth in the second quarter.
The Case for AVGO Stock
Broadcom is benefiting from the surging demand for AI infrastructure, which is driving significant upside potential for the company. In the fiscal first quarter of 2026, the company reported total revenues of $19.3 billion, up 29% year over year, with AI semiconductor revenue surging 106% to $8.4 billion. This momentum is expected to continue, as Broadcom guides for fiscal second-quarter 2026 AI semiconductor revenues of $10.7 billion, representing 140% year-over-year increase.
The uptick can be attributed to Broadcom's custom AI XPU (accelerator) business, which grew 140% year over year in the fiscal first quarter of 2026. Broadcom collaborates closely with six major customers, which include Google, Anthropic, Meta, and OpenAI, to develop and deploy custom AI accelerators tailored for large language model workloads.
Broadcom’s leadership in AI networking has been noteworthy. The company's Tomahawk 6 switch and 200G SerDes technology are capturing demand from hyperscalers, with AI networking revenue growing 60% year over year in the fiscal first quarter of 2026 and projected to represent 40% of total AI revenues in the fiscal second quarter of 2026.
Broadcom expects to generate more than $100 billion in AI chip revenue by 2027. It has a clear view of customer plans and reliable supply chains. The company is also seeing a shift toward more customized XPUs for specific AI workloads, which enhances its value proposition and deepens customer relationships.
Price Performance and Valuation of ALAB and AVGO
In the year-to-date period, ALAB and AVGO’s shares have gained 39.9% and 22.9%, 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, gross margin in the fiscal second quarter of 2026 is expected to be flat sequentially. High debt level is a headwind.
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 22.61X, higher than Broadcom’s 15.5X.
ALAB and AVGO's Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & AVGO?
The Zacks Consensus Estimate for ALAB’s 2026 earnings is currently pegged at $2.92 per share, which has increased 22% over the past 30 days. This indicates a 58.70% 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 2026 earnings is currently pegged at $11.45 per share, which has increased by a penny over the past 30 days. This indicates a 67.89% 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.