11 Best Young Stocks to Buy According to Hedge Funds

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9. Astera Labs Inc. (NASDAQ:ALAB)

Number of Hedge Fund Holders: 51

Astera Labs Inc. (NASDAQ:ALAB) designs, manufactures, and sells semiconductor-based connectivity solutions for cloud and AI infrastructure. It offers an intelligent connectivity platform that comprises semiconductor-based and mixed-signal connectivity products. The company serves hyperscalers and system original equipment manufacturers.

Morgan Stanley analyst Joseph Moore upgraded Astera to Overweight from Equal Weight with an unchanged price target of $99 on May 12. Astera is capitalizing on the demand for scale-up connectivity solutions within the expanding AI and cloud infrastructure market. This is evident by the increasing size of accelerator clusters, the necessity for higher-speed interconnects, and the growing complexity of overall system architectures.

In Q1 2025, Astera Labs Inc. (NASDAQ:ALAB) made $159.4 million in revenue, which was up 144% year-over-year. The company has announced the upcoming introduction of the Scorpio X-Series solutions, which optimize the utilization of AI accelerators. Astera anticipates that the adoption of the Scorpio X-Series will increase its silicon content per accelerator, potentially reaching ‘hundreds of dollars’. Pre-production shipments of the Scorpio X-Series are slated to commence in late Q2 2025.

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