Evercore picks Astera and MACOM as top AI connectivity stocks
Investing.com -- Evercore ISI’s latest “Semis-on-Fire” weekly, led by analyst Mark Lipacis, highlights connectivity as a primary constraint on AI infrastructure and a growing investment opportunity. As large language models scale from 20 billion to 20 trillion parameters in just three years, firms addressing high-speed data movement are positioned to outperform.
Astera Labs Inc (NASDAQ:ALAB) and MACOM Technology Solutions Holdings Inc (NASDAQ:MTSI) (MTSI) were reportedly standouts from Evercore’s 2025 Semiconductor Conference, both benefiting from rising demand for low-latency interconnects. ALAB secured more than 10 unique customer engagements for its Scorpio X Scale-Up Switch Fabric, aiming at a $2.5 billion total addressable market by 2028.
MTSI, meanwhile, is entering two product cycles that extend well into 2026, including a second wave of demand for Active Copper Cables (ACC) and an early-stage Long Path Optics (LPO) ramp beginning in the September quarter. A second LPO customer is expected shortly, reflecting growing infrastructure spend on AI data throughput.
NVIDIA’s (NASDAQ:NVDA) July quarter underscored its leadership in the AI ecosystem, driven by strong compute and networking growth. “Compute ex-H20 revs grew 12% QQ and in our view higher OpEx reflects NVDA’s goal to prosecute broadening set of opportunities in emerging AI markets,” the Evercore team wrote.
Marvell Technology Inc (NASDAQ:MRVL) delivered in-line results and raised guidance but saw shares fall on short-term concerns over its custom silicon AI revenues. Evercore remains constructive, saying, “We expect stock to consolidate as investors assess risk of NT custom silicon decline,” and sees 20x P/E as attractive for long-term AI exposure.
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Evercore reiterated Buy ratings on ALAB, MTSI, and NVDA as critical AI connectivity plays, with Advanced Micro Devices Inc (NASDAQ:AMD) and Lam Research Corp (NASDAQ:LRCX) also positioned for upside. The SOX index rose 4% on the week, led by double-digit gains in Rambus Inc (NASDAQ:RMBS), ALAB, and MTSI.
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