Don’t Overlook this AI Semiconductor Stock

This fast-growing semiconductor company helps connect servers to function as a single unit, but a recent selloff has seen its stock fall over 30%.

Key Takeaways

• Astera Labs is powering an architectural shift toward unified computing, where individual servers function as a single high-performance unit.

• In 2024, Astera co-founded the UALink Consortium with Advanced Micro Devices, Meta Platforms, Microsoft and others to develop an open industry standard for scaling AI computing.

• Overvaluation concerns have seen the Astera Labs’ stock price slump in 2025.

Astera Labs [ALAB] is a semiconductor company that provides connectivity and infrastructure solutions to large-scale cloud computing providers.

While the company may not be artificial intelligence (AI) household name like Nvidia [NVDA] or OpenAI, Astera Labs still plays an important role in helping this highly lucrative industry grow.

In short, Astera Labs is selling shovels in a gold rush.

Among other things, data centers and compute vendors use Astera Labs’ solutions to deploy and connect multiple GPUs — chips that are used to process data by AI applications — to function as a single high-performance unit.^[1]

With AI technology becoming as ubiquitous as the internet, demand for computing resources and Astera Labs’ products is growing. In Q1 2025, the company reported its highest quarterly revenue ever.^[2] However, strong earnings have not been mirrored in ALAB’s stock market performance.

While ALAB’s stock price is up over 231.89% from its IPO price of $36, the stock has lost 9.79% of its value in 2025.

However, the recent downturn in the ALAB share price could represent a market opportunity.

In this deep dive, we will focus on Astera Labs and the AI growth story, and compare ALAB to competitors like Credo Technology [CRDO] and Super Micro Computer [SMCI].