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Buy These 2 Little-Known AI Stocks Likely to Explode in Near Future
ALABAstera Labs, Inc.(ALAB) ZACKS·2025-02-24 14:25

Industry Overview - The artificial intelligence (AI) sector in the United States continues to thrive, with significant investments despite challenges from the Chinese DeepSeek ecosystem. The "magnificent 7" stocks are projected to invest 325billioninAIinfrastructureby2025,representinga46325 billion in AI infrastructure by 2025, representing a 46% year-over-year increase in capital spending on AI [1][2]. Company Analysis: Five9 Inc. (FIVN) - Five9 is ranked 1 by Zacks and specializes in intelligent cloud software for contact centers, offering a comprehensive virtual contact center platform [5][6]. - The company reported fourth-quarter 2025 adjusted earnings of 0.78 per share, exceeding the Zacks Consensus Estimate of 0.70,andquarterlyrevenuesof0.70, and quarterly revenues of 278.66 million, surpassing estimates by 4.18% [7]. - Five9's platform leverages AI tools, with personalized AI agents driving growth. The introduction of the Intelligent CX Platform powered by Five9 Genius AI on Google Cloud is a key development [8]. - The expected revenue and earnings growth rates for Five9 are 9.3% and 4.5% for the current year, with positive earnings estimate revisions noted [9]. - Five9's shares have a forward P/E of 16.33X, significantly lower than the industry average of 28.21X, indicating a lucrative valuation [10]. - The average price target for Five9 shares suggests a potential increase of 23.7% from the last closing price of 42.09,withamaximumupsideof59.242.09, with a maximum upside of 59.2% [11]. Company Analysis: Astera Labs Inc. (ALAB) - Astera Labs is ranked 2 by Zacks and focuses on connectivity solutions for cloud computing and AI applications, offering an Intelligent Connectivity Platform that includes both hardware and software [14]. - The company has seen strong demand for its AI platforms, particularly for products like Aries Retimers and Scorpio Fabric Switches, which are designed for AI infrastructure [15][16]. - Astera Labs expects revenues between 151 million and 155millionforthefirstquarterof2025,withnonGAAPearningsprojectedbetween155 million for the first quarter of 2025, with non-GAAP earnings projected between 0.28 and 0.29pershare[22].TheexpectedrevenueandearningsgrowthratesforAsteraLabsare69.10.29 per share [22]. - The expected revenue and earnings growth rates for Astera Labs are 69.1% and 48.8% for the current year, with significant positive revisions in earnings estimates [21][23]. - The average price target for Astera Labs shares indicates a potential increase of 44.4% from the last closing price of 85.72, with a maximum upside of 75% [24].