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Astera Labs vs. KLA: Which Semiconductor Stock Has More Upside?
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Key Takeaways
Astera Labs appears to offer greater upside on stronger earnings growth and rapid PCIe 6 adoption.
ALAB expects Q3 2026 revenues of $540M-$560M, with the midpoint implying about 40% sequential growth.
KLA sees advanced packaging process-control revenues near $1.1B in 2026, up more than 70% year over year.
Astera Labs (ALAB - Free Report) and KLA (KLAC - Free Report) are major players in the semiconductor industry. While ALAB focuses on high-speed connectivity solutions for AI-driven data centers, KLA provides advanced process control and inspection solutions that enable manufacturers to produce increasingly complex semiconductors used in AI data centers and applications.
So, ALAB or KLAC — Which of these semiconductor stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
Astera Labs is benefiting from a 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. In the second quarter of 2026, PCIe 6 products, including the Scorpio AI Fabric Switches and Aries Retimers, accounted for more than 50% of total revenues, highlighting the market leadership of ALAB’s Gen 6 portfolio.
The company’s diversified product portfolio is a key strength. Scorpio X-Series, now in volume production, is set to become ALAB’s largest product family by the third quarter of 2026, ahead of schedule. Aries signal conditioning products also delivered record revenues, driven by the transition to PCIe 6 and the increasing complexity of AI system deployments. Taurus, another product line, is ramping up with 800-gig deployments and next-generation 200-gig per lane solutions, expanding ALAB’s market reach.
The Aries and Taurus product families are also benefiting from semiconductor demand tied to AI infrastructure. Aries posted record quarterly revenues as PCIe 6 retimers gained traction across scale-up and scale-out systems. Higher accelerator cluster sizes, increased unit attach rates, and richer average selling prices are supporting growth. Meanwhile, Taurus is benefiting from the transition toward 800-gig Ethernet connectivity, while upcoming 1.6T and 3.2T solutions should expand its opportunity as data-center networks move to faster transmission speeds.
Astera Labs is benefiting from strong demand for its Aries, Taurus and Scorpio product families, all of which are expected to drive growth in the third quarter of 2026. For the same quarter, revenues are expected to be between $540 million and $560 million. The midpoint implies sequential growth of approximately 40%, driven by the Scorpio X-Series production ramp, continued Aries PCIe 6 retimer strength and preproduction Taurus shipments for 800-gigabit Ethernet applications. The Zacks Consensus Estimate for third-quarter revenues is pegged at $405.29 million, representing year-over-year growth of 75.78%.
The Case for KLAC Stock
KLA is benefiting from strong semiconductor demand, driven by accelerating investments in artificial intelligence (AI) infrastructure, leading-edge foundry/logic, memory, and advanced packaging. In the fourth quarter of fiscal 2026, revenues reached a record $3.66 billion, increasing 15% year over year and 7% sequentially. Management attributed the performance to rising AI infrastructure investments and greater process-control intensity across memory and advanced packaging.
AI infrastructure remains a major growth catalyst. Increasing AI compute requirements, hyperscale data-center investments, high-bandwidth memory (HBM) adoption and sophisticated packaging architectures require tighter process control to improve yields and accelerate production ramps. KLA highlighted that customer demand signals have strengthened materially, while visibility continues to improve. The company expects business momentum to accelerate through the second half of 2026 and significant growth to continue in 2027.
Advanced packaging provides another significant growth opportunity. KLA now expects advanced packaging process-control systems revenues to reach approximately $1.1 billion in calendar 2026, representing growth of more than 70% year over year and exceeding its previous expectation of high-50% growth. Meanwhile, Specialty Process, PCB and Component Inspection businesses are expected to grow more than 25% in calendar year 2026, supported by high-performance computing and greater package complexity.
The broader semiconductor equipment environment also remains favorable. KLA raised its calendar year 2026 wafer fabrication equipment market estimate, including advanced packaging, to the low-$150-billion range from its previous expectation of more than $140 billion. Broad-based investment across leading-edge logic, foundry, DRAM, HBM, NAND and advanced packaging is expected to sustain capacity expansion. KLA expects second-half 2026 revenues to increase roughly 20% from the first half.
Price Performance and Valuation of ALAB and KLAC
In the year-to-date period, shares of ALAB and KLAC have surged 54.5% and 39.2%, respectively. The outperformance of ALAB stock can be attributed to strong demand for its AI connectivity products, especially the Scorpio, Aries and Taurus portfolios.
Despite KLAC’s expanding portfolio, memory-component pricing remains a margin headwind, while tariffs, trade restrictions, and semiconductor capital-spending cyclicality add risks.
ALAB and KLAC Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, ALAB and KLA 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 16.47X, higher than KLA’s 11.92X.
ALAB and KLAC Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & KLAC?
The Zacks Consensus Estimate for ALAB’s 2026 earnings is pegged at $3.97 per share, which has been unchanged over the past 30 days. This indicates a 115.76% increase year over year.
The Zacks Consensus Estimate for KLAC’s fiscal 2027 earnings is pegged at $5.43 per share, which has been unchanged over the past 30 days. This indicates a 44.41% increase year over year.
ALAB’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 17.07%. KLAC’s earnings beat the consensus mark in all the trailing four quarters, delivering an average surprise of 2.75%. The average surprise of ALAB is higher than that of KLAC.
Conclusion
While both ALAB and KLAC are well-positioned to benefit from rising semiconductor and AI infrastructure investments, ALAB appears to offer greater upside, supported by stronger earnings growth, higher average earnings surprises, and rapid adoption of its PCIe 6 connectivity portfolio.
Despite KLA’s strong exposure to AI-driven semiconductor investments and advanced packaging, margin pressure from memory-component pricing, trade restrictions, and the cyclical nature of semiconductor capital spending remain key concerns.
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Astera Labs vs. KLA: Which Semiconductor Stock Has More Upside?
Key Takeaways
Astera Labs (ALAB - Free Report) and KLA (KLAC - Free Report) are major players in the semiconductor industry. While ALAB focuses on high-speed connectivity solutions for AI-driven data centers, KLA provides advanced process control and inspection solutions that enable manufacturers to produce increasingly complex semiconductors used in AI data centers and applications.
So, ALAB or KLAC — Which of these semiconductor stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
Astera Labs is benefiting from a 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. In the second quarter of 2026, PCIe 6 products, including the Scorpio AI Fabric Switches and Aries Retimers, accounted for more than 50% of total revenues, highlighting the market leadership of ALAB’s Gen 6 portfolio.
The company’s diversified product portfolio is a key strength. Scorpio X-Series, now in volume production, is set to become ALAB’s largest product family by the third quarter of 2026, ahead of schedule. Aries signal conditioning products also delivered record revenues, driven by the transition to PCIe 6 and the increasing complexity of AI system deployments. Taurus, another product line, is ramping up with 800-gig deployments and next-generation 200-gig per lane solutions, expanding ALAB’s market reach.
The Aries and Taurus product families are also benefiting from semiconductor demand tied to AI infrastructure. Aries posted record quarterly revenues as PCIe 6 retimers gained traction across scale-up and scale-out systems. Higher accelerator cluster sizes, increased unit attach rates, and richer average selling prices are supporting growth. Meanwhile, Taurus is benefiting from the transition toward 800-gig Ethernet connectivity, while upcoming 1.6T and 3.2T solutions should expand its opportunity as data-center networks move to faster transmission speeds.
Astera Labs is benefiting from strong demand for its Aries, Taurus and Scorpio product families, all of which are expected to drive growth in the third quarter of 2026. For the same quarter, revenues are expected to be between $540 million and $560 million. The midpoint implies sequential growth of approximately 40%, driven by the Scorpio X-Series production ramp, continued Aries PCIe 6 retimer strength and preproduction Taurus shipments for 800-gigabit Ethernet applications. The Zacks Consensus Estimate for third-quarter revenues is pegged at $405.29 million, representing year-over-year growth of 75.78%.
The Case for KLAC Stock
KLA is benefiting from strong semiconductor demand, driven by accelerating investments in artificial intelligence (AI) infrastructure, leading-edge foundry/logic, memory, and advanced packaging. In the fourth quarter of fiscal 2026, revenues reached a record $3.66 billion, increasing 15% year over year and 7% sequentially. Management attributed the performance to rising AI infrastructure investments and greater process-control intensity across memory and advanced packaging.
AI infrastructure remains a major growth catalyst. Increasing AI compute requirements, hyperscale data-center investments, high-bandwidth memory (HBM) adoption and sophisticated packaging architectures require tighter process control to improve yields and accelerate production ramps. KLA highlighted that customer demand signals have strengthened materially, while visibility continues to improve. The company expects business momentum to accelerate through the second half of 2026 and significant growth to continue in 2027.
Advanced packaging provides another significant growth opportunity. KLA now expects advanced packaging process-control systems revenues to reach approximately $1.1 billion in calendar 2026, representing growth of more than 70% year over year and exceeding its previous expectation of high-50% growth. Meanwhile, Specialty Process, PCB and Component Inspection businesses are expected to grow more than 25% in calendar year 2026, supported by high-performance computing and greater package complexity.
The broader semiconductor equipment environment also remains favorable. KLA raised its calendar year 2026 wafer fabrication equipment market estimate, including advanced packaging, to the low-$150-billion range from its previous expectation of more than $140 billion. Broad-based investment across leading-edge logic, foundry, DRAM, HBM, NAND and advanced packaging is expected to sustain capacity expansion. KLA expects second-half 2026 revenues to increase roughly 20% from the first half.
Price Performance and Valuation of ALAB and KLAC
In the year-to-date period, shares of ALAB and KLAC have surged 54.5% and 39.2%, respectively. The outperformance of ALAB stock can be attributed to strong demand for its AI connectivity products, especially the Scorpio, Aries and Taurus portfolios.
Despite KLAC’s expanding portfolio, memory-component pricing remains a margin headwind, while tariffs, trade restrictions, and semiconductor capital-spending cyclicality add risks.
ALAB and KLAC Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, ALAB and KLA 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 16.47X, higher than KLA’s 11.92X.
ALAB and KLAC Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & KLAC?
The Zacks Consensus Estimate for ALAB’s 2026 earnings is pegged at $3.97 per share, which has been unchanged over the past 30 days. This indicates a 115.76% 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 KLAC’s fiscal 2027 earnings is pegged at $5.43 per share, which has been unchanged over the past 30 days. This indicates a 44.41% increase year over year.
KLA Corporation Price and Consensus
KLA Corporation price-consensus-chart | KLA Corporation Quote
ALAB’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 17.07%. KLAC’s earnings beat the consensus mark in all the trailing four quarters, delivering an average surprise of 2.75%. The average surprise of ALAB is higher than that of KLAC.
Conclusion
While both ALAB and KLAC are well-positioned to benefit from rising semiconductor and AI infrastructure investments, ALAB appears to offer greater upside, supported by stronger earnings growth, higher average earnings surprises, and rapid adoption of its PCIe 6 connectivity portfolio.
Despite KLA’s strong exposure to AI-driven semiconductor investments and advanced packaging, margin pressure from memory-component pricing, trade restrictions, and the cyclical nature of semiconductor capital spending remain key concerns.
Currently, Astera Labs sports a Zacks Rank #1 (Strong Buy), making the stock a stronger pick than KLA, which has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.