ALAB Rides on Strong Scorpio Demand: Can It Outpace MRVL and CRDO?

Astera Labs ALAB is benefiting from robust demand for its Scorpio X-Series fabric switches, positioning itself as a formidable competitor to Marvell Technology MRVL and Credo Technology CRDO in the AI infrastructure connectivity market. In the second quarter of 2026, ALAB reported record revenues of $392.4 million, up 104% year over year, with Scorpio X-Series entering volume production and set to become the company’s largest product line by the third quarter of 2026.

This momentum is fueled by Scorpio’s advanced features, such as hardware-accelerated Hypercast and In-Network Compute, which deliver up to 2x performance improvements for AI workloads. The COSMOS software platform further enhances customer loyalty by enabling dynamic traffic shaping and real-time performance management.

The Scorpio product family delivered significant growth as the X-Series began shipping in initial production volumes across multiple lane configurations. The high-radix Scorpio X-Series entered volume production and is expected to scale materially during the second half of 2026. Management expects Scorpio to become the company’s largest product family in the third quarter, one quarter earlier than previously projected. The transition will be led by the 320-lane Scorpio X-Series fabric switch, which supports larger accelerator clusters and includes hardware-based Hypercast and in-network compute capabilities.

ALAB’s strong Scorpio demand, broadening customer base and technology leadership suggest it is well positioned to outpace MRVL and CRDO in the evolving AI infrastructure market. For the third quarter of 2026, revenues are expected to be between $540 million and $560 million. The midpoint implies sequential growth of approximately 40%, driven by the Scorpio X-Series production increase, continued Aries PCIe 6 retimer strength and preproduction Taurus shipments for 800-gigabit Ethernet applications.

How Competitors Fare Against ALAB

ALAB is facing stiff competition from other industry players, such as Marvell Technology and Credo Technology. Both companies are making strong efforts in the connectivity space.

In the first quarter of fiscal 2027, Marvell Technology emphasized its strength in 800G PAM4 products, a quick ramp of 1.6T solutions, and expanding traction in Ethernet switching as networking becomes more critical in larger AI clusters. The company also said that the shift toward larger, multi-site AI systems is increasing the importance of data center interconnect modules. 

Credo Technology recently announced that it is developing a new open interconnect standard within the Open Compute Project (OCP). It has established the OCP Open Chiplet Economy Lightweight Serial Interconnect (LSI) Workstream, aimed at developing efficient interconnect solutions for AI infrastructure. As part of the initiative, Credo Technology plans to contribute its OmniConnect lightweight AXI framer specification to OCP. The OCP LSI initiative is designed to support an open, interoperable ecosystem where compute, memory and other resources can be combined more efficiently. This could allow data-center operators and AI developers to tailor systems to specific workloads rather than relying on fixed architectures.

ALAB’s Share Price Performance, Valuation, and Estimates

ALAB shares have surged 66.9% in the year-to-date period, outperforming the broader Zacks Computer & Technology sector’s increase of 15.7%. The Zacks Internet - Software industry has decreased 4.2% in the same time frame.

ALAB Stock’s Performance

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ALAB stock is trading at a premium, with a forward 12-month Price/Sales of 18.23X compared with the  Internet - Software industry’s 3.93X. ALAB has a Value Score of F.

ALAB’s Valuation

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The Zacks Consensus Estimate for 2026 earnings is pegged at $1.19 per share, which has increased 54.5% over the past 30 days. This suggests 142.86% year-over-year growth.

Astera Labs, Inc. Price and Consensus

Astera Labs, Inc. price-consensus-chart | Astera Labs, Inc. Quote

ALAB’s Zacks Rank

Astera Labs currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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