Astera Labs, Inc. designs, manufactures, and sells semiconductor-based connectivity solutions for cloud and AI infrastructure. Its Intelligent Connectivity Platform is comprised of a portfolio of data, network, and memory connectivity products, which are built on a unifying software-defined architecture that enables customers to deploy and operate high performance cloud and AI infrastructure at scale. The company was incorporated in 2017 and is based in Santa Clara, California.

Astera Labs, Inc.

Сильный индекс, значительно вырос. Быки резко укрепили уверенность в своих позициях.

Strong index, significantly up. Bulls sharply strengthened confidence in their positions.

Слабый индекс, значительно упал. Рынок не поддерживает быков.

Weak index, significantly down. The market does not support the bulls.

Сильный индекс, значительно упал. Отток средств из лонгов резко увеличился и находится на высоком уровне.

Strong index, significantly down. The outflow of funds from longs has increased sharply and is at a high level.

In the latest close session, Astera Labs, Inc. (ALAB) was up +2.35% at $291.22. The stock exceeded the S&P 500, which registered a gain of 0.86% for the day. On the other hand, the Dow registered a gain of 0.98%, and the technology-centric Nasdaq increased by 0.96%.
The company's shares have seen a decrease of 11.85% over the last month, not keeping up with the Computer and Technology sector's loss of 0.56% and the S&P 500's loss of 1.96%.
The upcoming earnings release of Astera Labs, Inc. will be of great interest to investors. The company is forecasted to report an EPS of $1.19, showcasing a 142.86% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $550.39 million, indicating a 138.71% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.97 per share and revenue of $1.89 billion, indicating changes of +115.76% and +122.02%, respectively, compared to the previous year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Astera Labs, Inc. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Astera Labs, Inc. is currently sporting a Zacks Rank of #1 (Strong Buy).
Looking at its valuation, Astera Labs, Inc. is holding a Forward P/E ratio of 71.6. This represents a premium compared to its industry average Forward P/E of 19.87.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 85, finds itself in the top 35% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Why Astera Labs, Inc. (ALAB) Outpaced the Stock Market Today

Key Points
Astera Labs specializes in high-speed connectivity solutions for AI infrastructure and is growing revenue at a triple-digit pace.
Marvell Technology offers a broader portfolio of data infrastructure semiconductors and recently secured a decade-long partnership with a major cloud provider.
Which semiconductor stock deserves a spot in your portfolio?
Investors seeking exposure to artificial intelligence infrastructure must weigh the explosive growth of Astera Labs Inc (NASDAQ:ALAB) against the established scale and diverse portfolio of Marvell Technology Inc(NASDAQ:MRVL) to determine the better buy.
Both companies focus on the plumbing of the digital world, ensuring data moves quickly between processors and memory. While Astera Labs focuses on specialized connectivity for AI racks, Marvell offers a broader range of networking, storage, and custom compute solutions. This comparison explores which strategy offers more potential for long-term investors.
The case for Astera Labs
Astera Labs designs connectivity solutions that integrate various protocols to support rack-scale AI infrastructure, a high-growth niche among semiconductor stocks. The company serves major hyperscalers and equipment manufacturers who need to overcome data bottlenecks in massive data centers, though its revenue is highly concentrated. In 2025, one end customer -- Amazon.com Inc (NASDAQ:AMZN) -- accounted for over 70% of revenue, which adds a significant layer of risk to the business model.
According to its latest annual report, filed for the fiscal year ended Dec. 31, 2025, revenue reached close to $853 million, representing a significant jump of 115% compared with the prior fiscal year. This growth trajectory helped the company transition to a net income of just over $219 million after recording losses in the previous two years. The net margin for the latest year was close to 26%.
As of its December 2025 balance sheet, the debt-to-equity ratio was 0.0x, meaning the company carries no debt relative to its shareholder equity, while the so-called current ratio was 10.2x. Free cash flow for the period reached nearly $282 million. Note that stock-based compensation (SBC) represented roughly 50.1% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
The case for Marvell Technology
Marvell Technology provides data infrastructure semiconductors across AI, cloud, and enterprise markets. The company recently expanded its custom silicon partnership with Alphabet Inc (NASDAQ:GOOGL) to develop AI accelerators and networking components through 2033. It maintains a concentrated yet diverse customer base, with two customers each representing at least 10% of net revenue in its most recent fiscal year.
In its latest annual report, filed for the fiscal year ended Jan. 31, 2026, revenue reached nearly $8.2 billion, which is a 42% increase year over year. The company reported net income of close to $2.7 billion, resulting in a net margin of just about 33%. This performance marked a substantial recovery from the net losses reported in the two previous fiscal years.
According to its January 2026 balance sheet, the debt-to-equity ratio was approximately 0.3x, while its current ratio of 2.0x indicates it has twice as many current assets as current liabilities. Free cash flow for the most recent fiscal year was roughly $1.4 billion. Note that stock-based compensation (SBC) represented roughly 34% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
Risk profile comparison
Astera Labs faces significant risks from its heavy reliance on a small group of hyperscalers, as the loss of a major client would materially harm its finances. The company also deals with rapid technological obsolescence and must constantly innovate to support new standards like PCIe 6.0 and CXL. Because it uses a fabless model, it depends entirely on Taiwan Semiconductor Manufacturing Co (NYSE:TSM) for production, and trade restrictions involving China could further limit its market access.
Marvell Technology deals with intense competition from established leaders like Broadcom Inc (NASDAQ:AVGO) and Nvidia Corp (NASDAQ:NVDA), as well as customers who may design their own chips. Its $4.5 billion debt load limits its ability to react to economic downturns or finance new projects, while its reliance on partners in the Pacific Rim creates geopolitical vulnerability. Strategic acquisitions of smaller firms like Celestial AI carry risks of integration failure or future impairment charges if anticipated synergies are not realized.
Valuation comparison
Marvell Technology appears more conservatively valued on a sales basis, while Astera Labs commands a premium for its faster growth rate.
A Forward P/E ratio helps you compare the price of a stock against future earnings estimates, while the P/S ratio measures market value against total sales.
Metric
Astera Labs
Marvell Technology
Forward P/E
43.9x
54.1x
P/S ratio
43.0x
21.3x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Marvell's business is seen growing at about a 25% clip in the current fiscal 2027 to more than $12 billion revenue. Yet analysts expect net income to drop by around $1 billion to the ballpark of $1.6 billion. There are also some fears that its arrangement with Alphabet will take longer to generate significant revenue than previously expected.
Still, management is very bullish about the potential for on-board optics sales to AI data centers in the coming years. The OBO (also referred to in shorthand as NPO) business was $0 for Marvell earlier this year, and it will contribute about $300 million by the end of its fiscal 2027, the current year. In a few years, management indicates OPO/NPO will be much larger, though holding off on naming specific dollar figures yet. But it is worth noting Marvell is pitching the area as a new source of significant sales investors should expect.
Astera Labs, meanwhile, sees its business providing connectivity for AI data centers -- meaning chips that let CPUs, GPUs, memory, and storage inside an AI rack communicate, surging due to hyperscaler demand. Hyperscalers, those very large AI businesses, are expected to spend more than $1 trillion on tech in 2027.
Astera Labs delivered excellent results in the second quarter of 2026, as reported last month, with record revenue of $392.4 million, up 104% year over year. The performance was driven by broad-based strength across its product portfolio, reflecting the diversification of its business as it continues to win new designs from multiple customers and across multiple product categories. Wall Street sees sales more than doubling in 2026 to $1.9 billion, with net income of $588 million, also well more than double 2025 levels.
Both these stocks are enjoying the AI boom, and both are fully priced as growth stocks, as seen in their P/S and forward P/E ratios, above. Astera's quick growth could bring growing pains, and its overreliance on Amazon is a concern, yet we like it better than Marvell, given the company's general reliance on the emergence of the OPO/NPO product line as a source of future growth. It's still a very young business line to be betting on when Asatera Labs is showing excellent growth right now.
Should you buy stock in Astera Labs right now?
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Astera Labs vs. Marvell Technology: Which AI-Driven Tech Stock Is a Better Buy in 2026?

Key Points
Astera Labs provides essential connectivity hardware for the rapidly expanding AI data-center market.
Applied Materials is a foundational leader in the semiconductor equipment industry with multi-billion dollar cash flows.
Which semiconductor stock deserves a spot in your portfolio?
High-performance computing is currently undergoing a massive generational shift. Deciding between Astera Labs Inc (NASDAQ:ALAB) and Applied Materials Inc (NASDAQ:AMAT) means choosing between a fast-growing connectivity specialist and an established titan of manufacturing equipment.
Astera Labs focuses on the internal plumbing of data centers, providing chips that move data between processors. Applied Materials builds the actual machines that make those chips possible. While both benefit from artificial intelligence, they occupy very different rungs on the technology ladder.
The case for Astera Labs
Astera Labs sells high-speed connectivity hardware and software designed for AI-heavy data centers. Its primary products include PCIe and Ethernet solutions that help hyperscale cloud providers manage massive data workloads. In its latest annual report, filed for the period ending December 31, 2025, the company noted that one end customer represented more than 70% of its revenue. Customer concentration like this adds a layer of risk to the business.
In FY 2025, revenue reached nearly $853 million, which is an increase of approximately 115% over the prior year. This growth resulted in a net income of roughly $219 million, compared to a net loss in the previous fiscal year. The company recorded a net margin of close to 26% during this period. Such expansion is notable among semiconductor stocks catering to the cloud market.
The company carries no debt, resulting in a debt-to-equity ratio of 0.0x. This metric compares total debt to shareholder equity to show how a firm finances its assets. As of its December 2025 balance sheet, the so-called current ratio was nearly 10.2x, indicating a strong ability to cover short-term debts. Free cash flow was roughly $282 million. Note that stock-based compensation represented just about 50% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
The case for Applied Materials
Applied Materials provides the specialized equipment and materials-engineering solutions used to manufacture semiconductors and advanced displays. Its tools are essential for logic and memory chip production, serving a broad global customer base. In its latest annual report, filed for the fiscal year ended Oct. 26, 2025, two major customers accounted for approximately 19% and 15% of net revenue, respectively. This customer concentration means the company is sensitive to the spending plans of a few large manufacturers.
In FY 2025, revenue reached nearly $28.4 billion, reflecting a growth rate of more than 4% year over year. The company generated a net income of approximately $7 billion, maintaining a steady performance in a mature market. Its net margin was close to 25% for the year. While the growth rate is slower than that of smaller peers, the sheer scale of the revenue base provides significant stability.
As of its October 2025 balance sheet, the debt-to-equity ratio was roughly 0.3x. This ratio shows that for every dollar of equity, the company has about 30 cents in debt. Its current ratio stands at approximately 2.6x, indicating the firm has more than twice the short-term assets needed to cover its liabilities. Free cash flow for the fiscal year was nearly $5.7 billion. This cash flow, which is cash from operations minus capital spending, allows for consistent investment in research and development.
Risk profile comparison
Astera Labs faces substantial risks due to its heavy reliance on a small number of hyperscale customers like Amazon.com Inc (NASDAQ:AMZN). The loss of a single major partner or a reduction in AI infrastructure spending could severely impact its financial results. Furthermore, the company relies on third-party partners for integrated circuit fabrication, creating a bottleneck if manufacturing capacity is constrained. Geopolitical tensions in East Asia also threaten its supply chain and product distribution.
Applied Materials is navigating significant regulatory risks, including a $252 million settlement in early 2026 related to unauthorized shipments. The company is also vulnerable to international trade restrictions and tariffs, particularly those involving sales to China. It faces stiff competition from major players like Broadcom Inc (NASDAQ:AVGO) and Marvell Technology Inc (NASDAQ:MRVL) in the broader chip ecosystem. Finally, the inherent cyclicality of the semiconductor equipment industry can lead to volatile earnings when manufacturers reduce their capital budgets.
Valuation comparison
Applied Materials currently offers a lower Forward P/E based on future earnings estimates, whereas Astera Labs commands a much higher P/S ratio.
Metric
Astera Labs
Applied Materials
Forward P/E
43.9x
26.3x
P/S ratio
43.0x
12.2x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Astera Labs sees its business providing connectivity for AI data centers -- meaning chips that let CPUs, GPUs, memory, and storage inside an AI rack communicate -- surging due to hyperscaler demand. Hyperscalers, those very large AI businesses, are expected to spend more than $1 trillion on tech in 2027. Astera Labs delivered excellent results in the second quarter of 2026, as reported last month, with record revenue of $392.4 million, up 104% year-over-year. The performance was driven by broad-based strength across its entire product portfolio, reflecting the diversification of its business as it continues to win new designs across multiple customers and product categories. Wall Street sees sales more than doubling in 2026 to $1.9 billion, with net income of $588 million, also well more than double 2025 levels.
Applied Materials, meanwhile, is the largest supplier in the world of wafer fabrication equipment for semiconductors. Its wide slate of offerings in chip manufacturing gives it inroads with customers by selling integrated solutions across technologies, making it harder for competitors to dislodge it. The business posted a larger-than-expected rise in sales and income in its third quarter of fiscal 2026, reported last month. The business posted a 25% increase in revenue to $9.1 billion with a 43% jump in net income. Wall Street expects full-year sales to rise 21% to $34.3 billion, with a very healthy 50% gain in net income.
Astera's growth is impressive, but the stock is fully priced as a growth stock with its current P/S and forward P/E ratios. Applied Materials normally won't be as fast-growing as it is in 2026, but the business should continue to reap the benefits of the AI boom as well as its broader market position in tech. At a more attractive set of ratios than Astera, Applied Materials is the choice here for long-term investors.
Should you buy stock in Astera Labs right now?
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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Applied Materials, Broadcom, and Marvell Technology. The Motley Fool recommends Astera Labs. The Motley Fool has a disclosure policy.

Astera Labs vs. Applied Materials: Which Technology Stock Is a Better Buy in 2026?

Oracle ORCL reported first-quarter fiscal 2027 non-GAAP earnings of $1.92 per share, which beat the Zacks Consensus Estimate by 10.3% and increased 30% in dollar terms and 30% in constant currency (cc) on a year-over-year basis.
Total quarterly revenues increased 30% year over year to $19.3 billion, which beat the consensus mark by 1.11%, reflecting extraordinarily strong demand for Oracle's industry-leading cloud infrastructure and applications suites, particularly from AI-focused enterprises.
Cloud revenues (IaaS + SaaS) increased 62% to $11.6 billion, driven by 121% growth in Cloud Infrastructure (IaaS) and a 10% rise in Cloud Applications (SaaS). This marked a dramatic acceleration in cloud infrastructure growth compared with the prior quarter's 93% growth rate, signaling unprecedented momentum from AI and high-performance computing customer demand.
Oracle's Remaining Performance Obligations ended the first quarter at $664 billion, up $209 billion from the prior year and $26 billion sequentially from the end of the fiscal fourth quarter. The company booked more than $30 billion of additional AI cloud contracts in the fiscal first quarter, with most representing large-scale AI infrastructure deals where customers prepaid for cloud infrastructure capacity. This substantial backlog provides exceptional visibility into future revenue growth.
Oracle Corporation Price, Consensus and EPS Surprise
ORCL's Q1 Top-Line Details
Cloud Infrastructure revenues (IaaS) surged 121% in USD and 120% in cc to $7.4 billion, marking a notable acceleration from the fiscal fourth quarter's 93% growth rate. Cloud Application revenues (SaaS) were $4.2 billion, up 10% in USD and 10% in cc.
Total cloud revenues (SaaS plus IaaS) surged 62% in USD and 61% in cc to $11.6 billion, demonstrating that cloud remains the dominant driver of Oracle's growth trajectory. Cloud revenues now represent 60% of total quarterly revenues, reflecting the significant shift in the business toward infrastructure and applications.
Software revenues were down 3% to $5.5 billion, reflecting customers' continued migration from on-premises software to the Cloud. Services revenues were $1.4 billion, up 5%, and Hardware revenues were $0.8 billion, up 15%.
Operating Details of Oracle
Oracle generated first-quarter GAAP operating income of $6.7 billion, up 57%, while non-GAAP operating income rose to $8.2 billion, up 31%, driven by strong revenue growth and the scale benefits from cloud infrastructure expansion.
GAAP net income available to common shareholders reached $4.7 billion, up 60%, and non-GAAP net income available to common shareholders grew to $5.8 billion, up 34%. Fiscal first-quarter GAAP earnings per share increased to $1.56, up 55%, and non-GAAP earnings per share climbed to $1.92, up 30%.
ORCL's Balance Sheet & Cash Flow
Oracle's high operating income translated to a record fiscal first-quarter operating cash flow of $23 billion, up 184%. However, free cash flow was negative $5.4 billion for the fiscal first quarter as Oracle continued aggressive capital investment to support cloud infrastructure growth and customer demand.
Oracle completed a $20 billion at-the-market equity issuance during the fiscal first quarter, part of its previously disclosed capital investment program. The company spent $28.5 billion on capital expenditures during the quarter, reflecting the massive buildout of data center infrastructure. For fiscal 2027, Oracle expects capital expenditures to reach $90 to $95 billion, primarily for continued infrastructure expansion.
Total notes payable and borrowings stood at approximately $125.3 billion as of Aug. 31, 2026 (current portion of $7.6 billion and non-current portion of $117.7 billion). The board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock, consistent with prior quarters.
Forward Guidance
Oracle provided the following forward-looking guidance for second-quarter fiscal 2027. Total Revenues are expected to grow from 30% to 34% in both cc and USD. Total Cloud revenues are expected to grow between 64% and 70% in cc and 65% and 71% in USD. Non-GAAP earnings per share are expected to be between $1.83 and $1.91 in cc and between $1.85 and $1.93 in USD.
For fiscal 2027, the company raised full-year revenue guidance to at least $90 billion and raised non-GAAP EPS guidance to $8.10, indicating robust confidence in sustained cloud momentum throughout the year.
Zacks Rank & Other Stocks to Consider
Oracle currently carries a Zacks Rank #2 (Buy).
Advanced Energy Industries AEIS, Astera Labs ALAB and ACM Research ACMR are some other top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. AEIS, ALAB and ACMR sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AEIS shares have risen 28.1% in the year-to-date period. The Zacks Consensus Estimate for AEIS’ third-quarter 2026 earnings suggests year-over-year growth of 74.7%. The consensus estimate has been revised upward in the past 30 days.
ALAB shares have gained 64.8% in the year-to-date period. The Zacks Consensus Estimate for ACIW’s third-quarter 2026 earnings indicates a year-over-year growth of 143%. The consensus estimate has been revised upward in the past 30 days.
ACMR shares have surged 77.2% in the year-to-date period. The Zacks Consensus Estimate for ACMR’s third-quarter 2026 earnings suggests a year-over-year rise of 143%. The consensus estimate has been revised upward in the past 30 days.
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Oracle Q1 Earnings Beat Estimates, Cloud Growth Accelerates

Key Points
Astera Labs is positioned to benefit as AI systems require faster, more efficient movement of data between GPUs, CPUs, memory, and networking equipment.
Modine offers exposure to the growing demand for advanced cooling as servers generate heat.
Flex could benefit from the physical build-out of AI infrastructure by turning AI designs into integrated systems.
Artificial intelligence has looked like a software story for the past few years. Investors bought GPUs, cloud platforms, and model companies that can run AI models for everyday users. But there is another part of the AI boom that is becoming harder to ignore: AI requires a huge amount of physical infrastructure.
A server cannot run a large AI model without power. A rack packed with accelerators cannot operate without moving enormous amounts of data or removing the heat those chips generate. That creates an interesting opportunity for investors who want exposure to AI without buying the same handful of megacap stocks.
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Three companies stand out to me. They operate in very different markets, but all three are attacking physical bottlenecks created by increasingly powerful AI systems.
1. Astera Labs is solving the data movement problem
Astera Labs (NASDAQ: ALAB) may be one of the more overlooked companies in the AI infrastructure chain. Its technology sits between computing components, helping move data between CPUs, GPUs, memory, and networking equipment. That sounds less exciting than designing a GPU, but it becomes critical as AI systems grow more complex.
Astera's newest Scorpio X-Series 320-lane fabric switch is designed for rack-scale AI systems and is built to connect large numbers of accelerators. The company has also expanded into CXL memory controllers, Ethernet connectivity, and optical interconnects. In other words, Astera is trying to become a broader connectivity platform rather than relying on a single product.
That is the part I find compelling. AI performance increasingly depends on keeping processors fed with data. Faster chips do not help much when information cannot move between them efficiently.
2. Modine is betting that AI has to be cooled
Modine Manufacturing (NYSE: MOD) is an even less obvious AI stock. Its opportunity is simple: Powerful AI servers generate a lot of heat.
Modine's Airedale business makes cooling systems designed for data centers, including its new TurboChill 3+MW platform for high-density GPU environments. The company also entered into a long-term agreement worth more than $4 billion for Airedale cooling products through 2029, backed by a $165 million upfront payment from the customer to help fund capacity investments.
That customer commitment is important because cooling is not an optional feature that hyperscalers can remove when budgets get tight. As computing density increases, thermal management becomes part of the facility's basic architecture. Modine even created a dedicated data center segment this year, a sign that management sees the opportunity as large enough to deserve its own focus.
3. Flex is helping turn AI designs into real machines
Flex (NASDAQ: FLEX) may be the most practical name on this list.
The company manufactures complex electronic systems, and it is now applying that manufacturing expertise to AI infrastructure. Its AI factory reference designs combine power, high-density racks, networking, and liquid cooling into modular systems designed to accelerate deployment. Flex says the approach can reduce deployment timelines by up to 30%.
It is also manufacturing Advanced Micro Devices' instinct AI systems in the United States, including complete platforms with eight AMD GPUs, high bandwidth memory, high-speed interconnects, and liquid-cooling hardware supplied by its JetCool business. That gives Flex an interesting position. It is not trying to invent the next AI model. It is helping turn someone else's AI architecture into a physical system that can be delivered to a customer.
How I'd invest $1,000
I would not treat these as three interchangeable AI bets. I would put roughly $350 into Astera Labs, $350 into Modine, and $300 into Flex.
Astera offers the highest exposure to the semiconductor connectivity layer. Modine gives investors a bet on one of AI's unavoidable physical constraints: heat. Flex provides exposure to the manufacturing and systems integration aspects of the build-out. The AI era is becoming physical. Billions of dollars are being spent on servers, power systems, cooling equipment, networking, and factories. Investors do not have to own the company designing the smartest AI model to benefit from that spending.
Should you buy stock in Astera Labs right now?
Before you buy stock in Astera Labs, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Astera Labs wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $445,833!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,402,153!*
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Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Modine Manufacturing. The Motley Fool recommends Astera Labs and Flex. The Motley Fool has a disclosure policy.

Got $1,000? 3 Stocks Building the Physical Artificial Intelligence (AI) Era

Samsara Inc. IOT delivered better-than-expected second-quarter fiscal 2027 results. Non-GAAP earnings of 20 cents per share beat the Zacks Consensus Estimate by 17.7% and rose 66.7% year over year.
Revenues of $508.4 million increased 30% year over year and surpassed the consensus estimate by 5.2%. On a constant-currency basis, revenues grew 29%.
Growth was supported by large-customer expansion, multi-product adoption and emerging products. Ending annual recurring revenues, or ARR, reached $2.125 billion, up 30% year over year.
IOT's Net New ARR Growth Accelerates
Net new ARR was $134.1 million, up 28% year over year in both actual and constant currency. On a trailing-12-month basis, net new ARR totaled $485 million and grew 27% in constant currency, up from 14% growth in the year-ago period.
Samsara Inc. Price, Consensus and EPS Surprise
The company signed nine transactions with more than $1 million in net new annual contract value. This was its third-highest quarterly total. Management said second-quarter revenue outperformance reflected strong bookings and slightly better booking timing than in prior quarters.
Samsara's Large Customers Drive Expansion
IOT ended the quarter with 3,605 customers generating more than $100,000 in ARR, a quarterly increase of 242. ARR from this cohort reached $1.3 billion, up 38% year over year, and represented 63% of total ARR compared with 59% a year earlier.
The company also had 210 customers above $1 million in ARR after adding a record 20 during the quarter. ARR from these customers surpassed $500 million and grew more than 50% year over year for the third straight quarter. Average ARR per $100,000-plus customer rose 6% to $369,000.
IOT Benefits From Broader Product Adoption
Multi-product adoption remained a key expansion lever. Among $100,000-plus ARR customers, 96% subscribed to at least two products and 72% used three or more products, compared with 95% and 68%, respectively, a year ago. Core-customer dollar-based net retention, which reflects expansion net of contraction and attrition, was approximately 115%.
Emerging products contributed more than 20% of net new annual contract value, or ACV, for the third consecutive quarter. Eight of the top 10 net new ACV deals included an emerging product, while more than 60 transactions carried over $100,000 of emerging-product net new ACV. Customer adoption of some newer AI features increased more than fourfold in the last two months.
Samsara Expands Operating Profitability
Non-GAAP gross profit was $398 million, up from $305.7 million a year ago, while non-GAAP gross margin held at 78%. Non-GAAP operating income increased to $106 million from $59.7 million, and the operating margin expanded to 21% from 15%.
Non-GAAP sales and marketing expenses rose to $188.3 million from $148.7 million, but fell to 37% of revenues from 38%. R&D expenses increased to $65.1 million from $54.3 million, while the company’s revenue share declined to 13% from 14%. G&A expenses fell to $38.6 million from $43.0 million.
IOT Generates Higher Cash Flow
Operating cash flow increased to $73.5 million from $50.2 million in the year-ago quarter. Free cash flow rose to $64.7 million from $44.2 million, with the free cash flow margin at 13% compared with 11% a year earlier.
As of Aug. 1, 2026, cash and cash equivalents were $291.4 million compared with $318.8 million as of Jan. 31. Short-term investments increased to $537.5 million from $515.0 million over the same period.
Samsara Lifts Fiscal 2027 Revenue View
For the third quarter of fiscal 2027, Samsara expects revenues of $514-$516 million, indicating 24% year-over-year growth. The company projects a non-GAAP operating margin of 21% and non-GAAP earnings of 18-19 cents per share.
For fiscal 2027, revenues are projected at $2.043-$2.047 billion, up 26% year over year, with a 21% non-GAAP operating margin and non-GAAP earnings of 76-78 cents per share. The new revenue midpoint suggests a 2% raise from prior guidance.
Management expects the full-year free cash flow margin to be about 100 basis points below fiscal 2026 because of higher device needs, proactive inventory purchases and elevated supply-chain costs.
Zacks Rank & Stocks to Consider
IOT currently carries a Zacks Rank #3 (Hold).
Advanced Energy Industries AEIS, Astera Labs ALAB and ACM Research ACMR are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. AEIS, ALAB and ACMR sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AEIS shares have risen 28.1% in the year-to-date period. The Zacks Consensus Estimate for AEIS’ third-quarter 2026 earnings suggests year-over-year growth of 74.7%. The consensus estimate has been revised upward in the past 30 days.
ALAB shares have gained 64.8% in the year-to-date period. The Zacks Consensus Estimate for ACIW’s third-quarter 2026 earnings indicates a year-over-year growth of 143%. The consensus estimate has been revised upward in the past 30 days.
ACMR shares have surged 77.2% in the year-to-date period. The Zacks Consensus Estimate for ACMR’s third-quarter 2026 earnings suggests a year-over-year rise of 143%. The consensus estimate has been revised upward in the past 30 days.
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This article originally published on Zacks Investment Research (zacks.com).

Samsara Q2 Earnings Surpass Estimates, Revenues Rise Y/Y

In early trading on Friday, shares of Astera Labs topped the list of the day's best performing components of the Nasdaq 100 index, trading up 8.6%. Year to date, Astera Labs registers a 84.6% gain.
And the worst performing Nasdaq 100 component thus far on the day is Autodesk, trading down 6.9%. Autodesk is lower by about 25.3% looking at the year to date performance.
Two other components making moves today are Adobe, trading down 6.8%, and Honeywell International, trading up 7.5% on the day.
VIDEO: Nasdaq 100 Movers: ADSK, ALAB

Nasdaq 100 Movers: ADSK, ALAB

Astera Labs ALAB shares have plunged 24.2% over the past month, underperforming the broader Zacks Computer & Technology sector’s 2.5% decline and the Zacks Internet - Software industry’s 1.8% rise over the same period.
The company’s shares have also underperformed its peers, which include Marvell Technology MRVL and Cisco Systems CSCO. Both Marvell Technology and Cisco Systems are expanding their footprint in the AI infrastructure space. Shares of Marvell Technology and Cisco Systems have lost 5.6% and 10.1%, respectively, over the past month.
The underperformance can be attributed to higher operating expenses due to continued investment in its product roadmap. Challenging macroeconomic uncertainties and stiff competition remain headwinds.
However, Astera Labs shares have outperformed its peer, Credo Technology CRDO, which is also expanding its footprint in the AI infrastructure space. Credo Technology stock has plunged 30.6% over the past month. The outperformance can be attributed to strong demand for its AI connectivity products, especially the Scorpio, Aries and Taurus portfolios.
ALAB Stock Performance
ALAB Rides on Strong Scorpio Demand
Astera Labs is benefiting from robust demand for its Scorpio X-Series fabric switches, which is helping the company to fend off its competitors like Marvell Technology, Cisco Systems and Credo Technology. In the second quarter of 2026, ALAB reported record revenues of $392.4 million, up 104% year over year, with Scorpio X-Series entering volume production and set to become the company’s largest product line by the third quarter of 2026.
This momentum is fueled by Scorpio’s advanced features, such as hardware-accelerated Hypercast and In-Network Compute, which deliver up to 2x performance improvements for AI workloads. The COSMOS software platform further enhances customer loyalty by enabling dynamic traffic shaping and real-time performance management.
The Scorpio product family delivered significant growth as the X-Series began shipping in initial production volumes across multiple lane configurations. The high-radix Scorpio X-Series entered volume production and is expected to scale materially during the second half of 2026. Management expects Scorpio to become the company’s largest product family in the third quarter, one quarter earlier than previously projected. The transition will be led by the 320-lane Scorpio X-Series fabric switch, which supports larger accelerator clusters and includes hardware-based Hypercast and in-network compute capabilities.
ALAB Rides on Strong Aries and Taurus Demand
Astera Labs rides on robust demand for its Aries and Taurus product lines, which are driving significant growth and positioning the company for further upside.
Aries delivered record second-quarter revenues, supported by rising adoption of PCIe 6 retimers and gearboxes across scale-up and scale-out AI architectures. Growth is being fueled by larger accelerator clusters, higher unit attach rates and increased average selling prices associated with the PCIe 6 transition. PCIe 5 demand also remains resilient as inference workloads create additional use cases. 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.
In the second quarter of 2026, Taurus revenues grew strongly on increased unit shipments across AI and general-purpose computing platforms. The company also delivered preproduction volumes of 100-gigabit-per-lane Taurus Smart Cable Modules for 800-gigabit active electrical cables.
Astera Labs expanded its Taurus signal conditioning portfolio with 3.2T Smart Retimers and Smart Redrivers for 224G Ethernet and UALink connectivity, strengthening AI infrastructure capabilities. The new OCP-compatible design enables Smart Swap flexibility, while Unified COSMOS software adds advanced telemetry, diagnostics and intelligent link management across high-speed interconnects.
ALAB Offers Strong Q3 Guidance
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 third quarter of 2026, 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 $550.39 million, representing year-over-year growth of 138.71%.
Management projects non-GAAP earnings between $1.16 and $1.21 per share in the third quarter of 2026. The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $1.19 per share, which has increased 54.5% over the past 30 days. The figure implies a year-over-year increase of 142.86%.
Astera Labs, Inc. Price and Consensus
ALAB Shares Trade at a Premium
Astera Labs’ stock is trading at a premium, as suggested by the Value Score of F.
In terms of the forward 12-month Price/Sales, ALAB is trading at 17.81X, higher than the Computer & Technology sector’s 6.03X.
ALAB's Valuation
Conclusion
Astera Labs is well-positioned to benefit from strong AI infrastructure spending, supported by the rapid adoption of its Scorpio, Aries and Taurus product families. These factors justify its premium valuation.
Astera Labs stock currently sports a Zacks Rank #1 (Strong Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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ALAB Stock Down 24% in a Month: Should Investors Buy the Dip or Wait?

Hewlett Packard Enterprise HPE posted non-GAAP earnings of $1.11 per share for the third quarter of fiscal 2026, which increased 152.3% year over year and beat the Zacks Consensus Estimate of 95 cents by 16.8%.
Revenues of $12.21 billion rose 33.7% year over year and beat the consensus estimate by 1%. The quarter benefited from accelerating demand for traditional servers, AI systems and networking, while disciplined pricing and a richer networking mix supported profitability.
HPE’s normalized orders increased 42% year over year, and total AI backlog reached a record $7.6 billion exiting the quarter.
HPE's Networking Orders Outpace Shipments
Networking revenues were $2.89 billion, up 74.9% year over year on a reported basis and 10% on a normalized basis. The segment's operating margin was 22% compared with 22.1% in the year-ago quarter.
Hewlett Packard Enterprise Company Price, Consensus and EPS Surprise
Normalized Networking orders increased 36%, materially faster than revenues as supply constraints limited conversions. Campus & Branch revenues were $1.44 billion, while Routing contributed $788 million. Networks for AI orders reached $700 million in the quarter, taking cumulative orders to $2.2 billion and prompting HPE to raise its fiscal 2026 target to $2.5-$3 billion.
The company also signed a gigawatt-scale deal with Oracle for routers and switches supporting a major AI cloud infrastructure buildout. Management said networking purchase commitments more than doubled sequentially to help improve supply availability and convert the elevated backlog.
Hewlett Packard Enterprise's Cloud & AI Demand Accelerates
Cloud & AI revenues totaled $9.04 billion, up 25.4% year over year. The segment's operating margin expanded to 17% from 7%, supported by strong server demand, pricing and scale.
Server revenues rose 35.3% to $6.77 billion, while Storage revenues increased 10.2% to $1.29 billion. AI Systems orders were $2.4 billion, and backlog climbed to $6.8 billion. After quarter-end, HPE was awarded a $3.5 billion inferencing deal with a hyperscaler customer.
Private Cloud AI orders increased at a triple-digit rate year over year, while the HPE GreenLake customer count grew 18% to 52,000. Management said enterprises are moving from AI pilots toward production use cases, particularly agentic AI and inferencing workloads.
HPE Expands Margins on Pricing and Mix
Non-GAAP gross profit reached $4.93 billion, up from $2.73 billion a year ago. The non-GAAP gross margin widened to 40.4% from 29.9%, reflecting pricing discipline in traditional servers and a favorable mix.
Non-GAAP operating profit increased to $1.98 billion from $777 million, while the operating margin improved to 16.2% from 8.5%. Non-GAAP operating expenses rose 17.3% sequentially to $2.95 billion, mainly because of higher variable compensation.
Management expects gross margin to moderate as AI Systems become a larger portion of sales and traditional server margins normalize. Juniper integration synergies remain on track to reach a $600 million annualized run rate by the end of fiscal 2028, with the integration running ahead of plan.
Hewlett Packard Enterprise Strengthens Cash Flow
Operating cash flow was $1.64 billion, while free cash flow totaled $958 million. HPE returned $324 million to common shareholders through dividends and share repurchases during the quarter.
Cash and cash equivalents ended the period at $6.22 billion. Total net debt fell to $14.03 billion, and the net debt-to-adjusted EBITDA ratio declined to 1.8 times, below the company's two-times target more than a year ahead of its original plan.
Inventory ended the quarter at $11.82 billion as HPE built targeted supply to support higher orders and backlog. The cash conversion cycle improved by one day sequentially, helped by stronger collections and more favorable billing timing.
HPE Raises Fiscal 2026 and 2027 Outlook
For the fourth quarter of fiscal 2026, HPE expects revenues of $13.9-$14.8 billion and non-GAAP earnings of $1.20-$1.30 per share. Networking revenues are projected to grow 11-13%, while Cloud & AI revenues are expected to increase 60-72%.
For fiscal 2026, HPE raised its revenue growth outlook to 34-37% and non-GAAP earnings-per-share guidance to $3.75-$3.85. Free cash flow is now expected to be at least $3.75 billion.
For fiscal 2027, management raised its revenue growth framework to 13-17% and projected non-GAAP earnings-per-share growth of 16-20%. The company expects a 14-15% non-GAAP operating margin and free cash flow of at least $5 billion, with Networking revenue growth of 14-17% and Cloud & AI growth of 14-18%.
Zacks Rank & Other Stocks to Consider
HPE currently carries a Zacks Rank #2 (Buy).
Advanced Energy Industries AEIS, Astera Labs ALAB and ACM Research ACMR are some other top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. AEIS, ALAB and ACMR sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AEIS shares have risen 28.1% in the year-to-date period. The Zacks Consensus Estimate for AEIS’ third-quarter 2026 earnings suggests year-over-year growth of 74.7%. The consensus estimate has been revised upward in the past 30 days.
ALAB shares have gained 64.8% in the year-to-date period. The Zacks Consensus Estimate for ACIW’s third-quarter 2026 earnings indicates a year-over-year growth of 143%. The consensus estimate has been revised upward in the past 30 days.
ACMR shares have surged 77.2% in the year-to-date period. The Zacks Consensus Estimate for ACMR’s third-quarter 2026 earnings suggests a year-over-year rise of 143%. The consensus estimate has been revised upward in the past 30 days.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).

HPE Q3 Earnings Surpass Expectations, Revenues Rise Y/Y

Key Points
Astera Labs provides essential high-speed connectivity solutions for large-scale artificial intelligence data centers.
NVIDIA remains the dominant force in AI infrastructure by providing both the chips and the full software stack.
Which semiconductor stock offers the best potential for your portfolio as the AI build-out enters its next phase?
As the artificial intelligence build-out matures, investors must decide whether to back a specialized connectivity player like Astera Labs (NASDAQ:ALAB) or the industry titan NVIDIA (NASDAQ:NVDA) for their portfolios.
Astera Labs focuses on the high-speed connectivity needed to move data between processors, while NVIDIA provides the massive computing power that defines the modern data center. While both benefit from infrastructure demand, they offer different scales and market roles. Comparing their financial health and valuations reveals which provides a better balance of risk and reward.
The case for Astera Labs
Astera Labs designs semiconductor-based connectivity solutions that address data bottlenecks in rack-scale AI infrastructure. The company works closely with hyperscalers and AI accelerator vendors like Amazon to ensure seamless data flow. One end customer accounted for over 70% of revenue in the fiscal year ended Dec. 31, 2025, while the top three customers represented roughly 86%. Customer concentration like this adds a layer of risk to the business.
Financial performance has been strong, driven by the rapid expansion of AI data centers. In the fiscal year ended Dec. 31, 2025, revenue reached $852.5 million, representing a growth of 115.1% compared with the prior year. The company reported net income of $219.1 million, which resulted in a net margin of 25.7% for the period.
As of its December 2025 balance sheet, the current ratio stands at 10.2x. This ratio measures a company's ability to cover short term obligations with short term assets, where a higher number suggests a strong liquidity position. The debt-to-equity ratio is zero, indicating that the company carries virtually no debt relative to the value of its shareholders' equity. Free cash flow reached $281.8 million in the fiscal year ended Dec. 31, 2025. Note that stock-based compensation (SBC) represented 50.1% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
NVIDIA has evolved from a graphics card manufacturer into a full-stack AI infrastructure company, and in doing so, has become the leader among semiconductor stocks. Its products are fundamental to gaming, professional visualization, and data centers. In its latest annual report, filed for the fiscal year ended Jan. 25, 2026, the company disclosed that two customers accounted for 22% and 14% of total revenue respectively. Its deep integration with major cloud providers makes it a cornerstone of the global computing industry.
Growth at this scale remains a key highlight for the company. In the fiscal year ended Jan. 25, revenue reached $215.9 billion, a 65.5% increase year over year. Net income for the same period was $120.1 billion. This reflects a net margin of 55.6%, showing the high level of income generated from its total sales.
As of its January 2026 balance sheet, the debt-to-equity ratio is 0.1x. This means the company uses very little borrowed money compared to the equity held by its owners. The current ratio is 3.9x, which shows the business has significantly more current assets than current liabilities. Free cash flow for the fiscal year ended Jan. 25 was $96.7 billion.
Risk profile comparison
Astera Labs faces significant risks due to its highly concentrated customer base, which makes it vulnerable to order volatility or system redesigns by major tech firms. Geopolitical factors also play a role, as the company relies on international vendors for manufacturing and faces potential trade restrictions in East Asia. Furthermore, the rapid evolution of AI technology means any failure to meet new infrastructure standards could lead to competitive obsolescence.
NVIDIA must navigate evolving U.S. export controls that impact its global sales and complex supply chain operations. The company also faces intense competition from Microsoft and Amazon as they develop internal AI hardware. Additionally, legal and regulatory inquiries regarding sales practices and supply allocation represent ongoing hurdles for the company.
Valuation comparison
NVIDIA appears significantly more attractive on a valuation basis, trading at a much lower multiple of future earnings estimates despite its massive scale.
Forward P/E
67.0x
24.2x
P/S ratio
40.8x
18.1x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Artificial intelligence dramatically changed the business trajectories of Astera Labs and NVIDIA, yet according to NVIDIA CEO Jensen Huang, "AI has reached its inflection point." By this he means the AI sector is blossoming beyond a handful of hyperscalers to becoming a robust ecosystem involving organizations of all sizes.
Consequently, NVIDIA sees no slowdown in demand for its products, forecasting a 70% year-over-year revenue increase in its next fiscal year. This number would be larger if not for supply constraints. The semiconductor giant isn't the only winner in the AI market's next phase of growth.
Astera Labs is benefiting from the need of AI systems to churn through massive mountains of data at unprecedented speed. This makes its connectivity solutions valuable amid the current AI data center buildout, leading to record revenue of $392.4 million in the second quarter of 2026, up an impressive 104% year over year.
Although Astera Labs is doing well, the stock I would buy between these two is NVIDIA. Despite its leadership position, NVIDIA's share price valuation is far lower than Astera Labs stock, indicating it is the better value. Wall Street investors may be more bullish about Astera Labs, but NVIDIA is the leader in AI semiconductor chips, and its new Vera Rubin platform is coming out this year, positioning it for further sales growth as companies and governments adopt the latest and greatest tech to remain ahead of rivals in the AI arms race.
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Robert Izquierdo has positions in Amazon, Astera Labs, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Amazon, Microsoft, and Nvidia. The Motley Fool recommends Astera Labs. The Motley Fool has a disclosure policy.

Astera Labs, Inc.

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