Bill 'Latency Lord' Brennan
Fundamental Growth Investor, B2B/Sector Leaders & Picks-and-Shovels
Astera Labs looks relatively expensive because similarly fast-growing AI infrastructure names trade at much lower multiples. Broadcom and Nvidia are at 14x, Credo at 15x and Lumentum at 18x; comparable peers look 50-80% cheaper. Astera is a great company and not necessarily expensive in absolute terms. Its roughly 2x multiple over Credo may persist, but the setup looks harder; with no valuation support, it could fall 50% if weakness continues. x.com x.com x.com x.comÂ
Broadcom's stronger AI business looks cheap for its growth, making it one of the best buys in the market right now. AI chip revenue rose 221% to $16.7B last quarter, yet the stock trades at 19x forward earnings and a 0.35 PEG. Management sees AI revenue near $115B in fiscal 2027 and would raise that outlook if customers secure more land and power. Anthropic is on track to be its largest custom chip customer next year. Wall Street's $529 average target implies about 60% upside. x.comÂ
AI skepticism leaves Nvidia, Broadcom and Micron looking cheap on forward earnings. Their forward P/E ratios are 14, 18 and 5, respectively; the market may eventually stop doubting AI. x.comÂ
Astera Labs no longer looks expensive after falling 50% from its highs, trading below 35x NTM EBITDA with EBITDA expected to grow at a 60% CAGR for several years. Revenue is growing 105% YoY, with growth expected to accelerate for the next 2-3 quarters as margins expand. The stock is testing key support at its September 2025 highs, just above the 0.618 Fibonacci level and 200-day EMA. It is worth a look if the AI infrastructure buildout continues as planned. x.comÂ
Low forward earnings multiples across eleven stocks cannot persist indefinitely. Nvidia trades near 17.5x, its lowest in over a decade; Oracle near 15x, its lowest in six years. Uber is at 17x, Broadcom 19x, Vistra 15x, AppLovin 14.5x, TSMC 19x, Forgent Power Solutions 18x, Nokia 19.5x, American Express 17x and Western Digital 14x. x.com x.com x.com x.com x.com x.com x.com x.com x.com x.com x.comÂ
Anthropic's lack of profit makes NVIDIA, Broadcom, Meta and Amazon preferable investments. Their forward P/Es are 15x, 17.5x, 20x and 25x, respectively. x.comÂ
Astera Labs' chip connects every GPU in AI servers, positioning it to ride a data-center buildout that is just getting started. Quarterly revenue reached $392 million in Q2 2026, versus $65 million in Q1 2024. x.comÂ
Networking, power and compute look more durable than cyclical memory in the AI buildout. Lumentum's revenue compounded year after year across the 2010s and 2020s, unlike Micron's; AWS revenue also compounded. Lumentum, Nebius, Bloom Energy and Credo should heavily outperform SanDisk and Micron from here, though AI itself remains heavily doubted. x.com x.comÂ
Astera Labs is an amazing business, but its valuation is getting quite pricey. x.comÂ
Astera Labs is an invisible hero of AI, as its retimers and fabric switches let thousands of GPUs operate as one massive supercomputer. Demand for its solutions has grown manyfold over the past year, driving explosive revenue growth, despite last year's fears that efficient models like DeepSeek would hurt AI infrastructure names. x.comÂ
Astera Labs is an extremely good, unique business but still too expensive to buy. It is founder-led, growing fast and sits at the center of the AI infrastructure buildout, selling PCIe/CXL retimers and fabric switches to AWS, Azure and Google Cloud, but its valuation keeps it on the watchlist. x.com x.comÂ
