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.

Below is Validea's guru fundamental report for ASTERA LABS INC (ALAB). Of the 22 guru strategies we follow, ALAB rates highest using our P/B Growth Investor model based on the published strategy of Partha Mohanram. This growth model looks for low book-to-market stocks that exhibit characteristics associated with sustained future growth.
ASTERA LABS INC (ALAB) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 55% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ASTERA LABS INC
More Information on Partha Mohanram
About Partha Mohanram: Sometimes the best investing strategies don't come from the world of investing. Sometimes research that changes the investing world can come from the halls of academia. Partha Mohanram is a great example of this. While academic research has shown that value investing works over time, it has found the opposite for growth investing. Mohanram turned that research on its head by developing a growth model that produced significant market outperformance. His research paper "Separating Winners from Losers among Low Book-to-Market Stocks using Financial Statement Analysis" looked at the criteria that can be used to separate growth stocks that continue their upward trajectory from those that don't. Mohanram is currently the John H. Watson Chair in Value Investing at the University of Toronto and was previously an Associate Professor at the Columbia Business School.
Additional Research Links
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Validea Detailed Fundamental Analysis - ALAB

For Immediate Release
Chicago, IL – August 21, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Vertiv Holdings Co. VRT, Arista Networks Inc. ANET, Astera Labs Inc. ALAB, NVIDIA Corp. NVDA, Ballard Power Systems Inc. BLDP and Intel Corp. INTC.
Here are highlights from Wednesday’s Analyst Blog:
Buy & Hold 3 AI-Focused Data Center Cloud Infrastructure Developers
The artificial intelligence (AI) saga, supported by the massive growth of cloud computing and data centers, is yet to fully unfold. The demand for data center capacity surged to manage and store the vast amount of cloud computing-based data.
The AI infrastructure space remains rock solid supported by an extremely bullish demand scenario. According to a report by Bloomberg Intelligence, “The generative AI market is poised to explode, growing to $1.3 trillion over the next 10 years from a market size of just $40 billion in 2022.”
In order to reap the benefit of this enormous opportunity, we recommend investors buy at this stage three large AI-powered data center and cloud infrastructure developers and hold for the long term. These companies are: Vertiv Holdings Co., Arista Networks Inc. and Astera Labs Inc. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vertiv Holdings
Zacks Rank #1 Vertiv Holdings is a leading global provider of critical digital infrastructure and services for data centers, communication networks, and commercial and industrial environments. Its portfolio mainly consists of power, cooling, and IT infrastructure solutions and services, particularly the AI-enabled infrastructure.
Innovative Portfolio and Solid Execution
Vertiv is benefiting from an extensive product portfolio, which spans thermal systems, liquid cooling, UPS, switchgear, busbar and modular solutions. CEO Giordano Albertazzi said, "Our 35% sales growth and robust orders momentum reflect both strong market demand and expanded capabilities to serve customers' increasingly complex infrastructure needs."
Buoyed by unprecedented data center growth, VRT is strategically expanding capacity to accelerate its AI-enabled pipeline. Vertiv’s partnership with NVIDIA Corp. is a key catalyst. VRT aims to stay one GPU generation ahead of NVIDIA, enabling efficient, scalable power solutions for next-generation AI data centers.
As hyperscalers and enterprises increasingly scale AI deployments to support high-performance data centers, Vertiv’s solutions are gaining traction. Apart from NVIDIA, Vertiv has a rich partner base, which includes Ballard Power Systems Inc., Compass Datacenters, Intel Corp., ZincFive and Tecogen.
Robust Estimate Revisions
For 2025, the Zacks Consensus Estimate currently shows revenues of $9.97 billion, suggesting an improvement of 24.5% year over year and earnings per share of $3.82, indicating an increase of 34% year over year. The Zacks Consensus Estimate for current-year earnings has improved 7.3% over the last 30 days.
For 2026, the Zacks Consensus Estimate currently shows revenues of $11.55 billion, suggesting an improvement of 15.8% year over year and earnings per share of $4.85, indicating an increase of 26.9% year over year. The Zacks Consensus Estimate for current-year earnings has improved 10.5% over the last 30 days.
Arista Networks
Zacks Rank #2 Arista Networks is engaged in providing cloud networking solutions for data centers and cloud computing environments. ANET offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Impressive AI-Focused Strategy
Arista Networks is well-positioned with the right network architecture for client-to-campus data center cloud and AI networking backed by three guiding principles. These include the best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms.
ANET’s EOS Smart AI Suite and Arista AVA (Autonomous Virtual Assist) enhance AI job monitoring, deep-dive analytics, and proactive performance issue resolution. Arista AVA offers augmentation of pervasive visibility, continuous threat detection, and enforcement. Its AI suite also focuses on network security and optimization.
ANET’s AI-powered cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration.
The Arista 2.0 strategy is resonating well with customers with its modern networking platforms being foundational for transformation from silos to centers of data. The versatility of ANET’s unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from other competitors in the industry.
ANET should benefit from its software-driven, data-centric approach that helps customers build their cloud architecture. Diversification across its top verticals and product lines, along with an improved market demand supported by a flexible business model augurs well for long-term growth.
Solid Estimate Revisions
For 2025, the Zacks Consensus Estimate currently shows revenues of $8.73 billion, suggesting an improvement of 24.6% year over year and earnings per share of $2.81, indicating an increase of 23.8% year over year. The Zacks Consensus Estimate for current-year earnings has improved 9.8% over the last 30 days.
For 2026, the Zacks Consensus Estimate currently shows revenues of $10.28 billion, suggesting an improvement of 17.8% year over year and earnings per share of $3.18, indicating an increase of 12.9% year over year. The Zacks Consensus Estimate for current-year earnings has improved 8.2% over the last 30 days.
Astera Labs
Zacks Rank #1 Astera Labs is a developer of connectivity solutions for cloud computing and AI applications. Its key offerings include an Intelligent Connectivity Platform that has both hardware (like chips and modules) and software (COSMOS) designed to enhance connectivity in AI and cloud environments.
Strong Portfolio to Boost Prospects
Astera Labs has emerged as a key player in next-generation data center connectivity, with a full-stack portfolio spanning PCIe 6.0 and Ultra Accelerator (UA) Link for scale up, Ethernet for scale out and CXL for memory. The company is uniquely positioned to gain from the AI Infrastructure 2.0 transition thanks to an innovative portfolio. ALAB expects Scale-up connectivity for rack-scale AI infrastructure alone to add close to $5 billion of market opportunity by 2030.
Astera Labs is benefiting from strong demand for Aries, Taurus and Scorpio product families, all expected to drive growth in the third quarter of 2025. ALAB expects accelerated shipments of Scorpio P-Series switches and Aries 6 retimers on a customized rack-scale AI platform based on market-leading GPUs to boost top-line growth. Scorpio revenues are expected to account for more than 10% of total revenues in 2025, while becoming the largest product line for Astera Labs over the next several years.
In the second quarter of 2025, ALAB achieved a significant milestone with the volume production of its PCIe 6 product portfolio for customized rack-scale AI systems. Scorpio Fabric switches won multiple design wins in the reported quarter. ALAB continues to see strong demand for Scorpio P-Series and X-Series PCIe Fabric Switches. The company expects Scorpio X-Series to begin shipping for customized scale-up architectures in late 2025, with a shift to high-volume production over the course of 2026.
Continued deployment of AI and general-purpose systems at leading hyperscaler customers is benefiting the Taurus system. Meanwhile, Leo remains in pre-production shipments as customers scale their development rack clusters to qualify new systems, taking advantage of recently introduced CXL-enabled data center CPU platforms.
UA Link offers a significant growth opportunity for Astera Labs. UA Link combines the memory semantics of PCIe and the fast speed of Ethernet, but is devoid of the software complexity and performance limitations of Ethernet. ALAB expects proliferation of UA Link in 2027 and beyond to represent a significant key catalyst over the long term.
Excellent Estimate Revisions
For 2025, the Zacks Consensus Estimate currently shows revenues of $757.66 million, suggesting an improvement of 91.2% year over year and earnings per share of $1.58, indicating an increase of 88.1% year over year. The Zacks Consensus Estimate for current-year earnings has improved 17% over the last 30 days.
For 2026, the Zacks Consensus Estimate currently shows revenues of $984.46 million, suggesting an improvement of 29.9% year over year and earnings per share of $1.97, indicating an increase of 24.1% year over year. The Zacks Consensus Estimate for current-year earnings has improved 15.9% over the last 30 days.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Vertiv, Arista Networks, Astera Labs, NVIDIA, Ballard Power Systems and Intel

Below is Validea's guru fundamental report for ASTERA LABS INC (ALAB). Of the 22 guru strategies we follow, ALAB rates highest using our P/B Growth Investor model based on the published strategy of Partha Mohanram. This growth model looks for low book-to-market stocks that exhibit characteristics associated with sustained future growth.
ASTERA LABS INC (ALAB) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 55% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ASTERA LABS INC
More Information on Partha Mohanram
About Partha Mohanram: Sometimes the best investing strategies don't come from the world of investing. Sometimes research that changes the investing world can come from the halls of academia. Partha Mohanram is a great example of this. While academic research has shown that value investing works over time, it has found the opposite for growth investing. Mohanram turned that research on its head by developing a growth model that produced significant market outperformance. His research paper "Separating Winners from Losers among Low Book-to-Market Stocks using Financial Statement Analysis" looked at the criteria that can be used to separate growth stocks that continue their upward trajectory from those that don't. Mohanram is currently the John H. Watson Chair in Value Investing at the University of Toronto and was previously an Associate Professor at the Columbia Business School.
Additional Research Links
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

ALAB Factor-Based Stock Analysis

The artificial intelligence (AI) saga, supported by the massive growth of cloud computing and data centers, is yet to fully unfold. The demand for data center capacity surged to manage and store the vast amount of cloud computing-based data.
The AI infrastructure space remains rock solid supported by an extremely bullish demand scenario. According to a report by Bloomberg Intelligence, “The generative AI market is poised to explode, growing to $1.3 trillion over the next 10 years from a market size of just $40 billion in 2022.”
In order to reap the benefit of this enormous opportunity, we recommend investors buy at this stage three large AI-powered data center and cloud infrastructure developers and hold for the long term. These companies are: Vertiv Holdings Co. VRT, Arista Networks Inc. ANET and Astera Labs Inc. ALAB. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vertiv Holdings Co.
Zacks Rank #1 Vertiv Holdings is a leading global provider of critical digital infrastructure and services for data centers, communication networks, and commercial and industrial environments. Its portfolio mainly consists of power, cooling, and IT infrastructure solutions and services, particularly the AI-enabled infrastructure.
Innovative Portfolio and Solid Execution
Vertiv is benefiting from an extensive product portfolio, which spans thermal systems, liquid cooling, UPS, switchgear, busbar and modular solutions. CEO Giordano Albertazzi said, "Our 35% sales growth and robust orders momentum reflect both strong market demand and expanded capabilities to serve customers' increasingly complex infrastructure needs."
Buoyed by unprecedented data center growth, VRT is strategically expanding capacity to accelerate its AI-enabled pipeline. Vertiv’s partnership with NVIDIA Corp. NVDA is a key catalyst. VRT aims to stay one GPU generation ahead of NVIDIA, enabling efficient, scalable power solutions for next-generation AI data centers.
As hyperscalers and enterprises increasingly scale AI deployments to support high-performance data centers, Vertiv’s solutions are gaining traction. Apart from NVIDIA, Vertiv has a rich partner base, which includes Ballard Power Systems Inc. BLDP, Compass Datacenters, Intel Corp. INTC, ZincFive, and Tecogen.
Robust Estimate Revisions
For 2025, the Zacks Consensus Estimate currently shows revenues of $9.97 billion, suggesting an improvement of 24.5% year over year and earnings per share of $3.82, indicating an increase of 34% year over year. The Zacks Consensus Estimate for current-year earnings has improved 7.3% over the last 30 days.
For 2026, the Zacks Consensus Estimate currently shows revenues of $11.55 billion, suggesting an improvement of 15.8% year over year and earnings per share of $4.85, indicating an increase of 26.9% year over year. The Zacks Consensus Estimate for current-year earnings has improved 10.5% over the last 30 days.
Image Source: Zacks Investment Research
Arista Networks Inc.
Zacks Rank #2 Arista Networks is engaged in providing cloud networking solutions for data centers and cloud computing environments. ANET offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Impressive AI-Focused Strategy
Arista Networks is well-positioned with the right network architecture for client-to-campus data center cloud and AI networking backed by three guiding principles. These include the best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms.
ANET’s EOS Smart AI Suite and Arista AVA (Autonomous Virtual Assist) enhance AI job monitoring, deep-dive analytics, and proactive performance issue resolution. Arista AVA offers augmentation of pervasive visibility, continuous threat detection, and enforcement. Its AI suite also focuses on network security and optimization.
ANET’s AI-powered cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration.
The Arista 2.0 strategy is resonating well with customers with its modern networking platforms being foundational for transformation from silos to centers of data. The versatility of ANET’s unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from other competitors in the industry.
ANET should benefit from its software-driven, data-centric approach that helps customers build their cloud architecture. Diversification across its top verticals and product lines, along with an improved market demand supported by a flexible business model augurs well for long-term growth.
Solid Estimate Revisions
For 2025, the Zacks Consensus Estimate currently shows revenues of $8.73 billion, suggesting an improvement of 24.6% year over year and earnings per share of $2.81, indicating an increase of 23.8% year over year. The Zacks Consensus Estimate for current-year earnings has improved 9.8% over the last 30 days.
For 2026, the Zacks Consensus Estimate currently shows revenues of $10.28 billion, suggesting an improvement of 17.8% year over year and earnings per share of $3.18, indicating an increase of 12.9% year over year. The Zacks Consensus Estimate for current-year earnings has improved 8.2% over the last 30 days.
Image Source: Zacks Investment Research
Astera Labs Inc.
Zacks Rank #1 Astera Labs is a developer of connectivity solutions for cloud computing and AI applications. Its key offerings include an Intelligent Connectivity Platform that has both hardware (like chips and modules) and software (COSMOS) designed to enhance connectivity in AI and cloud environments.
Strong Portfolio to Boost Prospects
Astera Labs has emerged as a key player in next-generation data center connectivity, with a full-stack portfolio spanning PCIe 6.0 and Ultra Accelerator (UA) Link for scale up, Ethernet for scale out and CXL for memory. The company is uniquely positioned to gain from the AI Infrastructure 2.0 transition thanks to an innovative portfolio. ALAB expects Scale-up connectivity for rack-scale AI infrastructure alone to add close to $5 billion of market opportunity by 2030.
Astera Labs is benefiting from strong demand for Aries, Taurus and Scorpio product families, all expected to drive growth in the third quarter of 2025. ALAB expects accelerated shipments of Scorpio P-Series switches and Aries 6 retimers on a customized rack-scale AI platform based on market-leading GPUs to boost top-line growth. Scorpio revenues are expected to account for more than 10% of total revenues in 2025, while becoming the largest product line for Astera Labs over the next several years.
In the second quarter of 2025, ALAB achieved a significant milestone with the volume production of its PCIe 6 product portfolio for customized rack-scale AI systems. Scorpio Fabric switches won multiple design wins in the reported quarter. ALAB continues to see strong demand for Scorpio P-Series and X-Series PCIe Fabric Switches. The company expects Scorpio X-Series to begin shipping for customized scale-up architectures in late 2025, with a shift to high-volume production over the course of 2026.
Continued deployment of AI and general-purpose systems at leading hyperscaler customers is benefiting the Taurus system. Meanwhile, Leo remains in pre-production shipments as customers scale their development rack clusters to qualify new systems, taking advantage of recently introduced CXL-enabled data center CPU platforms.
UA Link offers a significant growth opportunity for Astera Labs. UA Link combines the memory semantics of PCIe and the fast speed of Ethernet, but is devoid of the software complexity and performance limitations of Ethernet. ALAB expects proliferation of UA Link in 2027 and beyond to represent a significant key catalyst over the long term.
Excellent Estimate Revisions
For 2025, the Zacks Consensus Estimate currently shows revenues of $757.66 million, suggesting an improvement of 91.2% year over year and earnings per share of $1.58, indicating an increase of 88.1% year over year. The Zacks Consensus Estimate for current-year earnings has improved 17% over the last 30 days.
For 2026, the Zacks Consensus Estimate currently shows revenues of $984.46 million, suggesting an improvement of 29.9% year over year and earnings per share of $1.97, indicating an increase of 24.1% year over year. The Zacks Consensus Estimate for current-year earnings has improved 15.9% over the last 30 days.
Image Source: Zacks Investment Research
#1 Semiconductor Stock to Buy (Not NVDA)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Buy and Hold 3 AI-Focused Data Center, Cloud Infrastructure Developers

For Immediate Release
Chicago, IL – August 15, 2025 – Today, Zacks Equity Research discusses Arista Networks ANET, Reddit RDDT and Astera Labs ALAB.
Industry: Internet Software
Link: https://www.zacks.com/commentary/2712841/3-internet-software-stocks-to-buy-from-a-prospering-industry
The Zacks Internet Software industry has been benefiting from accelerated demand for digital transformation and the ongoing shift to the cloud. The high demand for Software as a Service or SaaS-based solutions due to the increasing need for remote working, learning and diagnosis software has been a major driver for industry players.
The growing demand for solutions that support hybrid operating environments is a key catalyst. The increasing deployment of AI and generative AI is driving prospects. Industry players are leveraging AI to generate content that is keeping users engaged and attracting advertisers. Increasingly sophisticated cyberattacks have been driving cybersecurity application demand. Arista Networks, Reddit and Astera Labs are benefiting from these trends. However, heightened geopolitical risks and tariff uncertainties are major headwinds.
Industry Description
The Zacks Internet Software industry comprises companies offering application performance monitoring, infrastructure and application software, DevOps deployment and Security software. Industry participants offer online payment solutions, asset optimization software, multi-cloud application security and delivery, social networking, 3D printing applications, and cloud content management solutions.
They use the SaaS-based cloud computing model to deliver solutions to end-users, as well as enterprises. Hence, subscription is the primary revenue source. Advertising is also a major revenue source. Industry participants target a variety of end markets, including banking and financial services, construction, consumer packaged goods, education, energy, legal, various service providers, federal governments, and animal health technology and services.
3 Trends Shaping the Future of the Internet Software Industry
Adoption of SaaS Grows: The industry has been benefiting from the continued demand for digital transformation. Growth prospects are alluring due to the rapid adoption of SaaS, which offers a flexible and cost-effective delivery method for applications. It also cuts down on deployment time compared with legacy systems. SaaS attempts to deliver applications to any user, anywhere, anytime and on any device.
It has been effective in addressing customer expectations of seamless communications across multiple channels, including voice, chat, email, web, social media and mobile. This increases customer satisfaction and raises the retention rate, driving the top lines of the industry participants. Moreover, the SaaS delivery model has supported industry players in delivering software applications amid the coronavirus-led lockdowns and shelter-in-place guidance. Remote work, learning and health diagnosis have also boosted the demand for SaaS-based software applications.
Pay-As-You-Go Model Gains Traction: The increasing customer-centric approach is allowing end-users to perform all required actions with minimal intervention from software providers. The pay-as-you-go model helps Internet Software providers scale their offerings according to different user needs. The subscription-based business model ensures recurring revenues for industry participants. The affordability of the SaaS delivery model, particularly for small and medium-sized businesses, is another major driver. The cloud-based applications are easy to use. Hence, the need for specialized training is reduced significantly, which lowers expenses, driving profits.
Ongoing Transition to Cloud Creates Opportunities: The growing need to secure cloud platforms amid the increasing incidences of cyberattacks and hacking drives the demand for web-based cybersecurity software. As enterprises continue to move their on-premise workload to cloud environments, application and infrastructure monitoring are gaining importance. This is increasing the demand for web-based performance management monitoring tools.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Internet Software industry, placed within the broader Zacks Computer And Technology sector, carries a Zacks Industry Rank #74, which places it in the top 30% of more than 250 Zacks industries.
The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry's position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group's earnings growth potential. The industry's earnings estimates for 2025 have moved up 8.1% since April 30, 2025.
Given the positive outlook of the industry, there are several stocks worth picking for healthy portfolio returns. However, before we present the top industry picks, it is worth looking at the industry's shareholder returns and current valuation first.
Industry Beats S&P 500 and Sector
The Zacks Internet Software industry has outperformed the broader Zacks Computer and Technology sector and the S&P 500 Index in the past year.
The industry has returned 43.9% over this period compared with the S&P 500's jump of 17.5% and the broader sector's appreciation of 24.2%.
Industry's Current Valuation
On the basis of forward 12-month price-to-sales (P/S), which is a commonly used multiple for valuing Internet Software stocks, we see that the industry is currently trading at 5.81X compared with the S&P 500's 5.3X and the sector's forward 12-month P/S of 6.8X.
Over the last five years, the industry has traded as high as 5.94X and as low as 4.65X, with a median of 5.4X.
3 Stocks to Buy Right Now
Arista Networks– A Zacks Rank #1 (Strong Buy) company, Arista Networks is benefiting from its software-driven, data-centric approach that helps customers build their cloud architecture. You can see the complete list of today's Zacks #1 Rank stocks here.
Arista has made several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. The company has introduced new cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services. This supports video conferencing applications like Google Hangouts, Microsoft Teams and Zoom, driving market share.
The company's shares have appreciated 24.8% in the year-to-date period. The Zacks Consensus Estimate for its 2025 earnings is pegged at $2.81 per share, up 9.8% in the past 30 days.
Reddit- This Zacks Rank #1 stock is benefiting from strong growth in user engagement, including rising daily and weekly active users, ARPU gains and expanding advertiser tools like DPA, Reddit Pixel and CAPI.
Reddit's AI-powered features, including Reddit Answers, are key catalysts in enhancing content discovery and personalization. Reddit Answers has more than six million weekly users. The company aims to deepen advertiser onboarding and improve campaign outcomes through integrations with Smartly.io and Meta Platforms' campaign import tool.
Reddit shares have appreciated 43.7% year to date. The Zacks Consensus Estimate for 2025 earnings has surged 49.6% to $1.81 per share over the past 30 days.
Astera Labs- This Zacks Rank #1 company is benefiting from an innovative portfolio despite tariff uncertainty and intensifying competition. The company expects third-quarter 2025 revenues between $203 million and $210 million, suggesting an increase between 6% and 9% sequentially.
Astera Labs is benefiting from strong demand for Aries, Taurus and Scorpio product families, all expected to drive growth in the third quarter of 2025. ALAB expects accelerated shipments of Scorpio P-Series switches and Aries 6 retimers on a customized rack-scale AI platform based on market-leading GPUs to boost top-line growth.
ALAB shares have surged 43.1% year to date. The Zacks Consensus Estimate for ALAB's fiscal 2025 earnings is pegged at $1.58 per share, up 17% over the past 30 days.
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Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
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Zacks Industry Outlook Highlights Arista Networks, Reddit and Astera Labs

Guru Fundamental Report for ALAB

Guidewire Software GWRE stock has appreciated 23.3% year to date
compared with the Zacks Internet Software industry's growth of 23.7%. The broader Computer and Technology sector and the S&P 500 composite have returned 14.6% and 9.5%, respectively, over the same time frame. San Mateo, CA-based Guidewire is a provider of software solutions for property and casualty insurers.
GWRE closed last session at $207.87. The stock is trading 21% down from its 52-week high of $263.20. Does the pullback indicate a buying opportunity?
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Let us dive into GWRE’s pros and cons and determine the best course of action for your portfolio.
Factors Driving Growth for GWRE
Guidewire is benefiting from strong momentum in its cloud business, fueled by rising demand from insurers moving away from legacy systems toward cloud-based solutions. The company has strategically expanded its cloud ecosystem, now encompassing 26,000 Guidewire-specialized practitioners across 38 system integrators. Its focus on enhancing the Guidewire Cloud platform with new capabilities, including digital frameworks, automation, tooling and other cloud services, is expected to boost sales of subscription-based solutions in the long haul.
Also, the company announced its first sale of Guidewire Industry Intelligence, a pre-built predictive model embedded into ClaimCenter workflow in the last reported quarter. This solution is trained and validated using anonymized data available on Guidewire’s cloud deployments. This not only represents a new revenue opportunity but is a value addition for insurers looking to make data-driven claims decisions.
In the fiscal third quarter of 2025, Guidewire secured 17 new deals, 14 for various InsuranceSuite Cloud applications and three for InsuranceNow. These included seven core system wins with Tier 1 insurers and three with Tier 2 insurers.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Management’s efforts to drive cloud operations efficiency to boost cloud margins remain an additional tailwind. Non-GAAP gross margin expanded to 65.5% from 62.6% on a year-over-year basis. The subscription and support segment’s gross margin increased to 70.6% from 65.6% on a year-over-year basis, attributed to higher-than-expected revenues and increases in cloud infrastructure platform efficiency, along with $4 million in credits received from its cloud service provider. Services’ non-GAAP gross margin was 12.9% against negative 10.3% in the year-ago quarter.
For the fiscal fourth quarter, non-GAAP operating income is estimated in the range of $52-$60 million. Non-GAAP operating income for fiscal 2025 is estimated between $187 million and $195 million compared with $175-$185 million expected previously.
Driven by strong collections, Guidewire generated $32.4 million in cash from operations in the quarter under discussion, while free cash flow was nearly $27.8 million. As of April 30, 2025, cash and cash equivalents and short-term investments were $1,243.7 million, with $673.7 million of long-term debt. The company’s ability to generate positive cash flow while continuing to invest in growth initiatives provides a solid foundation for expansion.
Driven by strong revenue performance in the fiscal third quarter, Guidewire expects total revenues for fiscal 2025 to be between $1.178 billion and $1.186 billion compared with earlier guidance of $1.164 billion to $1.174 billion. Subscription revenues are now forecasted to be $660 million, while subscription and support revenues are expected to be $724 million. Services revenues are expected to be approximately $215 million.
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In the past 60 days, analysts have marginally revised estimates upwards for the current year.
GWRE Faces Headwinds
Higher costs remain a concern for Guidewire, especially amid prevailing weakness in global macroeconomic conditions. In the fiscal third quarter, total operating expenses increased 12.1% year over year to $178.2 million. Increasing costs can put downward pressure on the company’s profitability, especially if the revenue performance weakens.
Guidewire increasing global footprint, with new customers primarily coming from diverse markets such as Japan, Brazil, Belgium and other international regions, presents foreign exchange as well as integration risks. Strengthening the U.S. dollar could further exacerbate these challenges. Also, these initiatives involve execution risk, especially in regions with different regulatory requirements. If integration delays arise, these could weigh on operating margins or delay expected revenue contributions.
GWRE stock is also not so cheap, as its Value Style Score of F indicates a stretched valuation at this moment. The stock is trading at a premium with a forward 12-month price/sales of 12.95X compared with the industry’s 5.84X.
Retain GWRE Stock
With a Zacks Rank #3 (Hold), GWRE appears to be treading in the middle of the road and new investors could be better off if they trade with caution. The stock is also trading at a premium valuation. New investors could wait for a better entry point to capitalize on its long-term fundamentals, while investors owning the stock can stay put.
Stocks to Consider
Some better-ranked stocks worth consideration with the same industry space are Arista Networks (ANET), Astera Labs ALAB and F5, Inc. FFIV. All stocks sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANET’s 2025 earnings is pegged at $2.81 per share. ANET’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 12.8%. Its shares have gained 62.1% in the past year.
The Zacks Consensus Estimate for ALAB’s 2025 EPS is pegged at $1.35, unchanged in the past 60 days. Astera Labs’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 32.2%. Its shares have surged 394.1% in the past year.
The Zacks Consensus Estimate for FFIV’s fiscal 2025 EPS is pegged at $15.26, unchanged in the past seven days. FFIV’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 12.46%. Its shares have gained 70.6% in the past year.
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Guidewire Rises 23% YTD: Where Will the Stock Head From Here?

Astera Labs ALAB shares have jumped 112.6% in the past month, significantly outperforming the broader Zacks Computer and Technology sector’s appreciation of 5.1%. Shares of this semiconductor company have outperformed close peers, including Credo Technology CRDO, Broadcom AVGO and Marvell Technology MRVL over the same timeframe. Shares of Credo, Broadcom, and Marvell have returned 27.1%, 13.6% and 7.4%, respectively.
ALAB’s outperformance can be attributed to strong second-quarter 2025 results, which were reported on Aug 5. Since then, ALAB shares have jumped 41.7%, outperforming the broader sector’s return of 2.1%. Shares of Credo, Broadcom, and Marvell have returned 13.7%, 6.8% and 1.5%, respectively, over the same time frame.
Astera Labs’ second-quarter 2025 results benefited from strong demand for the signal conditioning portfolio, driven by PCIe scale-up and Ethernet scale-out connectivity applications in custom ASIC platforms. Net revenues surged 149.7% year over year to $192 million, surpassing the Zacks Consensus Estimate by 11.1%. Scorpio exceeded 10% of total revenues, making it the fastest ramping product line in the history of Astera Labs.
ALAB Stock’s One-Month Performance
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Astera Labs expects third-quarter 2025 revenues between $203 million and $210 million, suggesting an increase between 6% and 9% sequentially. The company is benefiting from strong demand for Aries, Taurus and Scorpio product families, all expected to drive growth in the third quarter of 2025.
Strong Portfolio to Boost ALAB’s Prospects
Astera Labs has emerged as a key player in next-generation data center connectivity, with a full-stack portfolio spanning PCIe 6.0 and Ultra Accelerator (UA) Link for scale up, Ethernet for scale out and CXL for memory. The company is uniquely positioned to gain from the AI Infrastructure 2.0 transition thanks to an innovative portfolio. ALAB expects Scale-up connectivity for rack-scale AI infrastructure alone to add close to $5 billion of market opportunity by 2030.
In the second quarter of 2025, ALAB achieved a significant milestone with the volume production of its PCIe 6 product portfolio for customized rack-scale AI systems. Scorpio Fabric switches won multiple design wins in the reported quarter. ALAB continues to see strong demand for Scorpio P-Series and X-Series PCIe Fabric Switches. The company expects Scorpio X-Series to begin shipping for customized scale-up architectures in late 2025, with a shift to high-volume production over the course of 2026.
Astera Labs is benefiting from strong demand for Aries and Taurus product families. Diversification across both GPU and custom ASIC-based systems for a variety of applications, including scale-up and scale-out connectivity, is a key catalyst for ALAB’s Aries product family. Aries 6 solution that supports PCIe 6 began volume ramp within rack-scale merchant GPU-based systems during the second quarter of 2025.
Continued deployment of AI and general-purpose systems at leading hyperscaler customers is benefiting the Taurus system. Meanwhile, Leo remains in pre-production shipments as customers scale their development rack clusters to qualify new systems, taking advantage of recently introduced CXL-enabled data center CPU platforms.
UA Link offers a significant growth opportunity for Astera Labs. UA Link combines the memory semantics of PCIe and the fast speed of Ethernet, but is devoid of the software complexity and performance limitations of Ethernet. ALAB expects proliferation of UA Link in 2027 and beyond to represent a significant key catalyst over the long term.
Expanding Partner Base Bodes Well for ALAB
Astera Labs is benefiting from a rich partner base that includes NVIDIA, AMD and Alchip.
ALAB is advancing next-gen data center infrastructure with the introduction of a PCIe 6-ready reference design based on NVIDIA Blackwell-based MGX platform that leverages Scorpio Smart Fabric Switches for AI and cloud infrastructure. Scorpio-based solutions enable users to maximize GPU productivity through enhanced data center observability, telemetry, and diagnostics using ALAB’s COSMOS rack-scale management software.
In the second quarter of 2025, Astera Labs expanded its collaboration with NVIDIA to support NVLink Fusion. ALAB is providing additional optionality for customers to deploy NVIDIA AI accelerators while leveraging high-performance scale-up networks based on NVLink technology.
ALAB announced a partnership with Alchip Technologies to advance the silicon ecosystem for AI rack-scale infrastructure by combining its comprehensive connectivity portfolio with the latter’s custom ASIC development capabilities.
ALAB Offers Positive Q3 View; Earnings Estimates Trend Up
Non-GAAP earnings are expected between 38 cents and 39 cents per share for the third quarter.
The Zacks Consensus Estimate for earnings is pegged at 35 cents per share, up by a penny over the past 30 days, indicating 52.2% growth from the figure reported in the year-ago quarter.
Astera Labs, Inc. Price and Consensus
The consensus mark for third-quarter 2025 revenues is pegged at $206.7 million, indicating 82.8% year-over-year growth.
ALAB Shares Trading 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 35.56X, higher than the sector’s 6.73X, Broadcom’s 20.28X, Credo’s 24.97X and Marvell’s 7.44X.
Price/Sales Ratio (F12M)
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Conclusion
Astera Labs’ innovative portfolio, along with a rich partner base, is expected to drive prospects despite a premium valuation. ALAB currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.
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ALAB Jumps 113% in a Month: Here's Why the Stock is Still a Buy

CoreWeave, Inc. CRWV reported a second-quarter 2025 loss per share of 60 cents compared with a loss of $1.62 in the year-ago quarter.
Adjusted net loss for the quarter was $131 million compared with $5 million a year ago.
The Zacks Consensus Estimate was pegged at a loss of 23 cents per share.
Revenues in the quarter were a record $1212.8 million, which beat the Zacks Consensus Estimate by 12.5%. Total revenues jumped 207% year over year. The top-line performance was driven by increasing demand for the AI-cloud platform.
In the second quarter, CoreWeave recorded a series of major achievements — securing high-profile customer wins across AI labs, hyperscalers and enterprises. Highlights included a $4 billion expansion with OpenAI, adding to the previously announced $11.9 billion deal and onboarding a new hyperscaler customer that expanded within the quarter. Other key partnerships were formed with BT Group, Cohere, Hippocratic AI, Hologen, LG CNS, Mistral, Moonvalley, Novel and Woven by Toyota.
Revenue backlog (inclusive of remaining performance obligation and other amounts the company estimates will be recognized as revenues in future periods under committed customer contracts) was $30.1 billion, rising 86% year over year. This growth was driven by the OpenAI strategic agreement and its expansion in the first half of 2025, along with a major hyperscaler contract signed and extended in the second quarter of 2025. Year to date, revenue backlog has doubled to $6.9 billion.
Following the results, shares declined 9.2% in the after-market trading session yesterday. CRWV’s shares have gained 93.2% in the past year, significantly outperforming the 14.3% rise of its Internet Software industry.
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CRWV’s Q2 Margin Performance
Total operating expenses were $1.2 billion compared with $317.7 million in the year-ago quarter.
Operating income was $19.2 million compared with operating income of $77.7 million in the prior-year quarter.
Adjusted operating income was $200 million, up 134% year over year, while adjusted operating margin was 16%, down from 22%.
Adjusted EBITDA was $753.2 million compared with $249.8 million in the prior-year quarter.
CRWV’s Q2 Cash Flow and Liquidity
As of March 31, 2025, CRWV had $2.5 billion in cash, cash equivalents and restricted cash. The company exited the second quarter with cash used in operating activities of $251.3 million, while capex was $2.9 billion.
CRWV’s Guidance for Q3 & 2025
CRWV expects full-year 2025 revenues to be between $5.15 billion and $5.35 billion compared with $4.9 billion to $5.1 billion projected earlier. Adjusted operating income is still forecasted to be between $800 million and $830 million. Capex is estimated to be $20 billion to $23 billion.
For the third quarter, CRWV projects revenues to be between $1.26 billion and $1.3 billion. Adjusted operating income is forecasted to be between $160 million and $190 million. Interest expense is projected to be $350 million to $390 million. Capex is forecasted to be between $2.9 billion and $3.4 billion.
CRWV’s Zacks Rank
CRWV currently carries a Zacks Rank #4 (Sell).
Recent Performance of Other Companies in the Same Space
Astera Labs ALAB reported second-quarter 2025 non-GAAP earnings of 44 cents per share, surpassing the Zacks Consensus Estimate by 33.33%. The company reported earnings of 13 cents per share.
Net revenues surged 149.7% year over year to $192 billion, surpassing the Zacks Consensus Estimate by 11.1%.
Shares of ALAB surged 394.1% in the past year.
Datadog DDOG reported second-quarter 2025 non-GAAP earnings per share (EPS) of 46 cents, which beat the Zacks Consensus Estimate by 12.20%. The bottom line rose 7% from the year-ago quarter.
Revenues of $826.8 million beat the consensus mark by 4.55% and increased 28.1% year over year.
Shares of DDOG gained 13% in the past year.
F5, Inc. FFIV reported third-quarter non-GAAP earnings of $4.16 per share, which surpassed the Zacks Consensus Estimate by 19.2% and came ahead of management’s guidance of $3.41-$3.53 (midpoint of $3.47). The bottom line increased 23.8% year over year.
F5’s revenues of $780 million for the third quarter beat the consensus mark by 3.6%. The top line rose 12.2% on a year-over-year basis. Revenues also came ahead of management’s guidance of $740-$760 million (midpoint of $750 million).
Shares of FFIV increased 70.6% in the past year.
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