Could This AI Infrastructure Stock Become the Nvidia of the 2030s?

Back before Nvidia became the $5-trillion tech behemoth it is today, it was a large-cap company that sold GPUs mainly for gaming, while also investing in expanding its applications through its Compute Unified Device Architecture (CUDA) platform. The expansion eventually included usage in 3D rendering, visualization tasks, cryptocurrency mining, simulations, and, of course, artificial intelligence (AI) training and inference.

Mind you, this was back in the early 2000s, way before there was a clear market for artificial intelligence. So when the AI boom happened, Nvidia's investments paid dividends.

Was it luck? Some of it, yeah.

But you can't deny that a little foresight can go a long way.

Image source: Getty Images.

That brings us to 2017, when three Texas Instruments employees noticed that current cloud and AI data center connectivity hardware was struggling to keep up with increased workloads and faster speeds. So they quit their jobs and founded Astera Labs (NASDAQ: ALAB).

This semiconductor company now designs and manufactures connectivity solutions for AI and cloud data centers, with the clear-cut goal of eliminating bottlenecks in data-centric systems. This promising pitch has already snagged investors' attention.

But does it have what it takes to be Nvidia 2.0? Let's talk about it.

A wild ride

First, let's talk stock price. Astera Labs went public back in March 2024 with a $36 price tag. However, it closed at over $60 on its first day. Since then, the stock has seen some massive movement, swinging from a low of around $36 to a high of nearly $263.

As of Nov. 28, 2025, after fierce selling pressure in September, Astera stock is trading at around $154, down about 41% from its all-time high but up 328% from its IPO price. Is this the bottom?

Institutions are seeing the upside

Recently, Ensign Peak Advisors, Southeast Asset Advisors, and Legal & General Group have either opened new positions or increased existing holdings in the company. They've joined the likes of AllianceBernstein L.P., JPMorgan Chase & Co., and the Swiss National Bank.

Right now, 60% of Astera Lab's outstanding shares are owned by institutional investors. This suggests healthy institutional backing -- essentially a vote of confidence from market professionals.

Solid Q3 financials, but are the valuations valid?

Now, following smart money is a valid strategy. After all, Wall Street has access to research and data that retail investors do not, at least not easily.

However, it's never a good idea to blindly jump into investments without knowing what you're buying. So, let's take a look at Astera's numbers.

In its recent third-quarter financials, Astera Labs reported a 104% jump in revenue to $230.6 million, with gross margins of 76%.

Even better, the company's bottom line improved from a $7.6 million loss back in the third quarter of 2025 to a $91 million profit this quarter. That's nearly 1,300% in growth right there. And it marks the company's fourth consecutive quarter of GAAP profitability -- a solid sign of stability, and even more impressive for a company that's less than 10 years old.

However, the price-to-earnings ratio is currently sitting at 174 times, while the price-to-sales is at 27 times. That's not exactly cheap; from these numbers alone, we can say investors are pricing in an accelerated growth trajectory over the next few years.

Is Astera stock a buy at these levels?

Consider that Astera stock maintains a moderate buy rating, with an average analyst rating of 4.32 from 19 analysts. The high target price is set at $275, which suggests as much as 78% upside over the next year.

However, the average score has fallen slightly over the last three months, which tells me that at least some analysts are cautious. But if you want a high-risk, high-reward play with extremely high potential in AI infrastructure, Astera Labs might be the best bet going into the next decade.

JPMorgan Chase is an advertising partner of Motley Fool Money. Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase, Nvidia, and Texas Instruments. The Motley Fool recommends Astera Labs. The Motley Fool has a disclosure policy.