Core Insights - Astera Labs (ALAB) and KLA Corporation (KLAC) are significant players in the semiconductor industry, with ALAB focusing on high-speed connectivity solutions for AI-driven data centers and KLAC providing advanced process control and inspection solutions for semiconductor manufacturing [1][2]. Semiconductor Market Growth - The global semiconductor market size was $598.06 billion in 2025 and is projected to grow to $1,477.06 billion by 2034, reflecting a CAGR of 10.60% from 2026 to 2034 [2]. Astera Labs (ALAB) Overview - ALAB is leveraging a robust and diversified product portfolio to meet the increasing demands of AI infrastructure and connectivity solutions, with strong demand for its PCIe solutions driving growth [3][6]. - In Q4 2025, ALAB expanded its product offerings with custom NVLink Fusion connectivity solutions aimed at optimizing AI infrastructure performance and reducing costs [4]. - The company is also enhancing its Smart Fabric Switch roadmap to cater to next-generation scale-up networking, with the merchant scale-up switching market expected to reach $20 billion by 2030 [5]. KLA Corporation (KLAC) Overview - KLAC's strong portfolio and leadership in process control systems enable customers to manage increasing design complexity, accelerating time to market for diverse semiconductor designs [7]. - Advanced packaging revenue for KLAC grew over 70% year over year in 2025, with continued growth expected in 2026 [8]. - KLAC's solutions are critical for AI-driven applications, utilizing AI-driven analytics to optimize chip manufacturing [9]. Financial Performance - In the trailing 12-month period, ALAB shares surged 53.3%, while KLAC shares increased by 102.9%, attributed to KLAC's dominant market share and strong investment in AI infrastructure [12]. - ALAB expects Q1 2026 revenues between $286 million and $297 million, driven by strong demand for PCIe and AI solutions [11]. - The Zacks Consensus Estimate for ALAB's 2026 earnings is $2.39 per share, indicating a 29.89% year-over-year increase, while KLAC's estimate is $36.58 per share, reflecting a 9.92% year-over-year increase [18]. Valuation Insights - Both ALAB and KLAC shares are currently considered overvalued, with ALAB trading at a forward Price/Sales ratio of 15.69X and KLAC at 13.08X [16]. - ALAB is facing challenges with profit margins due to a shift towards a higher mix of hardware sales and increased operating expenses from R&D and acquisitions [13]. Conclusion - While both companies are positioned to benefit from the growing semiconductor market, KLAC presents a greater upside potential due to its leadership in process control and advanced packaging growth [21].

Key Takeaways ALAB expands AI connectivity portfolio with NVLink Fusion and Scorpio switch ramp-ups. ALAB sees addressable market topping $25B in five years, driven by copper and scale-up solutions. ALAB shares jumped 44.9% in six months; 2026 EPS estimate rose 4.36% to $2.39. Astera Labs (ALAB) is rapidly expanding its portfolio to address the growing demands of AI infrastructure and connectivity solutions. It benefits from strong demand for its PCIe solutions, which have been a major growth driver.The com ...