Main Insights
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Companies that subtly support the artificial intelligence (AI) sector are set to experience continuous sales growth.
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Astera Labs, Iren, and Nokia represent three such enterprises providing foundational support.
- Explore 10 stocks we prefer over Astera Labs ›
While OpenAI, the creator of ChatGPT, garners much attention—particularly with rumors of its possible initial public offering—the firm is currently incurring significant losses. Some estimates indicate it may require over $200 billion to fulfill its growth ambitions.
Instead of waiting for OpenAI to become a viable investment, it may be wiser to focus on stocks from businesses that are “pick-and-shovel” players in the AI boom. These companies provide crucial support services as AI technology moves towards advanced functionalities, including agentic AI.
Astera Labs’ AI Focus
Astera Labs specializes in solutions that improve connectivity within AI data centers. AI operations require significant computational power, necessitating the creation of considerably larger facilities capable of managing extensive data flows. Astera’s products enhance data transmission speed and efficiency and eliminate bottlenecks, resulting in impressive year-over-year revenue growth of 104% to a record $230.6 million in Q3.
Iren’s Growing Role in AI
Iren, originally a Bitcoin mining operation, has evolved to rent out its cloud computing capacity to major clients like Microsoft, with a recent $9.7 billion contract. Its comprehensive vertical integration allows it to manage operational costs effectively. In Q3, Iren reported a remarkable 355% increase in revenue, totaling $240.3 million, and achieved a net income of $384.6 million.
Nokia’s Strategic Pivot
Nokia has seen significant stock price growth of around 40% over the past year, driven by its focus on AI and development of edge networks. The company is working on advancing 6G wireless technology to handle the immense data requirements of AI applications. In Q3, its sales rose by 12% to 4.8 billion euros, supported by AI-driven demand, alongside a remarkable 114% increase in optical networking revenues.
While Astera Labs, Iren, and Nokia may not attract as much media attention as OpenAI, their roles as technology suppliers for AI systems position them well for sustained sales growth in the future.
Should You Invest in Astera Labs?
Before deciding to invest in Astera Labs, you may want to look at recommendations from the Motley Fool Stock Advisor, which recently identified other stocks with significant potential that do not include Astera Labs. The advisor boasts a solid average return of 937%, significantly outperforming the S&P 500’s 194%.
