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Artificial intelligence (AI) has taken Wall Street by storm, emerging as the hottest investment theme over the past year. As companies scramble to harness AI’s game-changing potential, tech giants are pouring billions into AI, fueling advancements in everything from cloud computing to autonomous systems. But it’s not just a corporate gold rush. The U.S. government is also stepping in with an unprecedented commitment to AI infrastructure, ensuring America stays at the forefront of this technological revolution.
Recently, President Donald Trump unveiled the Stargate venture at the White House alongside SoftBank (SFTBY) CEO Masayoshi Son, OpenAI CEO Sam Altman, and Oracle (ORCL) co-founder Larry Ellison. Initially beginning with a $100 billion investment, this joint initiative aims to inject up to an eye-popping $500 billion into the project over the next four years.
Stargate is poised to reshape the AI landscape, accelerating innovation and cementing the U.S. as a global AI leader. While the usual tech giants have already seen notable gains from this announcement, the ripple effects of Stargate extend far beyond Silicon Valley’s biggest names. Thus, let’s zoom in on three such overlooked stocks that stand to benefit as this venture takes shape.
Stock #1: Arista Networks
California-based Arista Networks (ANET) is a leader in client-to-cloud connectivity. The company’s award-winning platforms are the backbone of massive AI workloads, high-performance data centers, and enterprise-scale routing. With a focus on agility, automation, security, and real-time analytics, Arista’s advanced network operating stack delivers seamless performance, ensuring the world’s most demanding digital environments stay fast, intelligent, and resilient.
Valued at a market capitalization of around $137.2 billion, shares of Arista have skyrocketed almost 61% over the past year.
Arista posted its Q3 earnings report on Nov. 7, which blew past both Wall Street’s top and bottom-line projections. With revenue of $1.8 billion, the company achieved solid 20% year-over-year growth, beating projections by roughly 3%. In a move to broaden its appeal to more investors, Arista’s board of directors also approved a 4-for-1 stock split during the quarter, which took effect on Dec. 4.
Adjusted EPS of $2.40 ($0.60 on a split-adjusted basis) surged an impressive 31.1% year-over-year, easily surpassing Wall Street’s forecast. Looking ahead to Q4, management anticipates revenue to range between $1.85 billion and $1.90 billion, while non-GAAP gross margin is expected to be around 63% to 64%.
Additionally, the company forecasts non-GAAP operating margin for the quarter to come in at approximately 44%, positioning it for continued growth and profitability. Analysts tracking Arista Networks project the company’s bottom line to surge a notable 28.8% to $1.97 per share in 2024, followed by another 10.7% growth to $2.18 per share in 2025.
Wall Street appears optimistic about ANET stock, with a consensus “Moderate Buy” rating overall. Of the 19 analysts offering recommendations, 13 advise a “Strong Buy,” one gives a “Moderate Buy,” four suggest “Hold,” and the remaining one maintains “Strong Sell.”
The average analyst price target of $115.03 indicates 8% potential upside from the current price levels, while the Street-high price target of $135 suggests that ANET could rally as much as 26.7% from here.
Stock #2: Corning
With a legacy of innovation spanning 170 years, New York-based Corning (GLW) has redefined materials science with groundbreaking advancements in glass, ceramics, and optical physics. The company’s expertise fuels category-defining products across diverse industries, from optical communications and semiconductors to mobile electronics and life sciences.
With a market cap of nearly $43.8 billion, shares of Corning delivered gains of almost 60% over the past 52 weeks, easily outpacing the broader market’s gains during the same time frame.
Apart from its price action, the company is also committed to rewarding investors. On Dec. 13, Corning paid its shareholders a quarterly dividend of $0.28 per share. This brings its annualized dividend to $1.12 per share, which offers a highly enticing 2.25% yield.
Corning reported its Q4 earnings before the opening bell on Jan. 29, which surpassed analyst forecasts on both the top and bottom lines. The company’s core sales of $3.9 billion climbed an impressive 18% year over year, while its non-GAAP EPS of $0.57 showcased a remarkable 46% annual improvement.
Strong execution and operational efficiency drove a 220-basis-point year-over-year expansion in core operating margin to 18.5%, alongside a robust 390-basis-point increase in core return on invested capital (ROIC) to 12.7%. Capping off a year of exceptional free cash flow generation, the company delivered a solid $1.25 billion for fiscal 2024, reinforcing its financial strength.
The company wrapped up its first year of its “Springboard” plan, which aims to add over $3 billion in annualized sales and reach a 20% operating margin by the end of 2026. With Q4 performance exceeding management expectations, the company now plans to “upgrade this high-confidence plan” at its investor event in March.
Looking forward to Q1, management forecasts core sales to grow 10% year over year to approximately $3.6 billion, with core EPS growing approximately 30% to a range of $0.48 to $0.52.
GLW stock has a consensus “Moderate Buy” rating on Wall Street. Of the 12 analysts covering the stock, eight advise a “Strong Buy,” and the remaining four maintain a “Hold.”
The average analyst price target of $54.92 indicates 9.3% potential upside, while the Street-high price target of $62 suggests that GLW could rally as much as 23% from here.
Stock #3: Astera Labs
California-based Astera Labs (ALAB) is revolutionizing AI and cloud infrastructure with cutting-edge connectivity solutions designed for peak performance and scalability. As a leading player in intelligent networking, the company’s purpose-built platform seamlessly integrates PCIe®, CXL®, and Ethernet semiconductor-based solutions with its powerful COSMOS software suite, delivering a software-defined architecture that is both adaptive and future-ready.
Trusted by hyperscalers and data center giants, Astera Labs drives innovation with flexible, high-speed, and interoperable solutions that redefine efficiency in the AI era. Presently standing at a market cap of around $14.2 billion, Astera, which made its public debut just last year, has posted stunning gains of 100% over the past six months.
Following a much rosier-than-expected fiscal 2024 Q3 earnings report published on Nov. 4, shares of Astera shot up a remarkable 37.7% in a single trading session on Nov. 5. The company dazzled investors with a record revenue of $113.1 million, which marked a whopping 206% year-over-year jump, comfortably blowing past Wall Street’s forecast figure of $97.4 million.
While Astera registered a modest loss of $0.05 per share on a GAAP basis, its adjusted EPS of $0.23 managed to crush estimates by a 35% margin. Speaking on the Q3 performance, CEO Jitendra Mohan emphasized that Astera Labs has entered a new growth phase, evident from its impressive Q3 results, which marked its fifth consecutive revenue record.
The CEO noted that the company is scaling multiple product families across AI platforms, including third-party GPUs and its own AI accelerators.
For Q4, the company projects revenue to land between $126 million and $130 million, while gross margin is expected to be approximately 75% on both a non-GAAP basis and GAAP basis. In addition, adjusted EPS for the upcoming quarter is forecast to land between $0.25 and $0.26.
Overall, Wall Street remains highly bullish on ALAB stock, maintaining a consensus rating of “Strong Buy.” Of the 12 analysts offering recommendations, 11 advise a “Strong Buy,” and the remaining one analyst maintains a “Moderate Buy.”
The average analyst price target of $118.50 indicates 34.6% potential upside, while the Street-high price target of $150 suggests that ALAB could rally as much as 70.4% from here.
