Astera Labs ALAB and Broadcom AVGO are major players in the AI infrastructure market, particularly in high-speed connectivity solutions such as PCIe and CXL retimers and switches. While Astera Labs focuses on PCIe 6, CXL and Ethernet products, Broadcom has established itself as a long-standing leader in PCIe switches and infrastructure software.
So, ALAB or AVGO — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.
The Case for ALAB Stock
ALAB is rapidly expanding its portfolio to address the growing demands of AI infrastructure and connectivity solutions. In the second quarter of 2026, the company reported revenues of $392.4 million, up 104% year over year, driven by broad-based strength across its product portfolio. This growth is fueled by hyperscaler and cloud infrastructure investments, with industry forecasts projecting AI and cloud spending to reach $1 trillion by 2027.
Its product portfolio, including Scorpio, Aries, and Taurus, has been a key catalyst. 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 reported quarter, Taurus revenues grew strongly, driven by 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.
Aster Labs is benefiting from strong demand for its Aries, Taurus, and Scorpio product families, all of which are expected to drive growth in the third quarter of 2026. For the same quarter, revenues are expected to be between $540 million and $560 million. The midpoint implies sequential growth of approximately 40%.
The Case for AVGO Stock
Broadcom is benefiting from the surging demand for AI infrastructure, which is driving significant upside potential for the company. In the second quarter of fiscal 2026, the company reported total revenues of $22.2 billion, up 48% year over year, with AI semiconductor revenues reaching $10.8 billion, a 143% increase from the previous year. This explosive growth is primarily driven by the insatiable need for XPUs and networking solutions to power large-scale AI workloads.
A key factor behind Broadcom’s momentum is its deep partnerships with leading AI players such as Google, Anthropic, OpenAI and Meta. In April 2026, Broadcom secured long-term agreements to supply multiple generations of TPUs and AI networking to Google, and is providing gigawatt-scale compute capacity to Anthropic and OpenAI. These strategic relationships ensure a robust pipeline of demand and position Broadcom as a critical supplier in the AI ecosystem.
The company’s technology leadership in both AI compute (XPUs) and networking is another major advantage. Broadcom is shipping industry-leading 100-terabit Ethernet switches and is preparing to launch next-generation 200-terabit switches. Its networking solutions, which represented almost 40% of fiscal second-quarter of fiscal 2026 AI revenues, are essential for connecting and scaling AI clusters across data centers.
Broadcom expects AI semiconductor revenues to double in the second half of 2026 and projects full-year AI semiconductor revenues of $56 billion, up approximately 180% from fiscal 2025. The company reiterates guidance for AI semiconductor revenues to exceed $100 billion in fiscal 2027, with continued growth into fiscal 2028. With record bookings and long-term customer agreements, AVGO appears well-positioned to capture further upside as enterprise AI adoption accelerates globally.
Price Performance and Valuation of ALAB and AVGO
In the year-to-date period, ALAB and AVGO’s shares have gained 92.5% and 13.4%, respectively. The outperformance of ALAB stock can be attributed to its robust and diversified product portfolio and its expanding partner base.
Despite Broadcom’s expanding AI portfolio, the stock faces risks from customer concentration, intense competition, lower gross margin from revenue mix and a debt-heavy balance sheet. Large purchase commitments and AI rack backstop obligations add execution risk. A high debt level is a headwind.
ALAB and AVGO Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, ALAB and Broadcom shares are currently overvalued as suggested by a Value Score of F and D, respectively.
In terms of forward 12-month Price/Sales, ALAB shares are trading at 21.2X, higher than Broadcom’s 11.58X.
ALAB and AVGO Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for ALAB & AVGO?
The Zacks Consensus Estimate for Astera Labs 2026 earnings is currently pegged at $3.97 per share, which has increased 33.67% over the past 30 days. This indicates a 115.76% year-over-year rise.
The Zacks Consensus Estimate for Broadcom’s 2026 earnings is currently pegged at $11.74 per share, which has increased by a penny over the past 30 days. This indicates a 72.14% year-over-year rise.
Astera Labs earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 17.07%. Broadcom’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 2.19%. The average surprise of Astera Labs is higher than that of Broadcom.
Conclusion
While both ALAB and AVGO are well-positioned to capitalize on the booming AI infrastructure market, Astera Labs appears more attractive given its stronger growth prospects, rising earnings estimates and robust demand for its connectivity solutions.
Despite Broadcom’s strong AI growth and strategic customer relationships, its higher debt, customer concentration and competitive pressures could weigh on its future performance.
Currently, Astera Labs sports a Zacks Rank #1 (Strong Buy), making the stock a stronger pick than Broadcom, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Broadcom Inc. (AVGO): Free Stock Analysis Report
Astera Labs, Inc. (ALAB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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