The artificial intelligence (AI) revolution has transformed the data center from a traditional computing facility into a high-performance AI factory. While graphics processing units have captured much of investors' attention, an equally important investment theme has emerged in AI data center networking. Semiconductor companies supplying Ethernet switches, optical interconnects, digital signal processors (DSPs), custom networking ASICs, retimers, and electro-optical components are witnessing unprecedented demand as hyperscalers race to build larger and more powerful AI clusters.
Semiconductor stocks operating in the AI data center space are experiencing strong demand due to the ramp-up of AI cluster sizes. The number of networking ports, optical transceivers, Ethernet switches and high-speed cables grows exponentially rather than linearly, creating an enormous opportunity for semiconductor suppliers. The transition toward higher networking speeds is further accelerating semiconductor demand. AI clusters are rapidly migrating from 400G networking to 800G Ethernet, while the industry is already preparing for 1.6-terabit (1.6T) networking beginning in 2027.
As the leading AI companies, hyperscalers, AI fabs and sovereign spending increase for ramping up the AI infrastructure, the semiconductor companies serving the compute, scale-out networking, storage, scale-up interconnect, custom AI application-specific integrated circuit chips, optical communication and power delivery chips for these AI players are also on the rise. The global semiconductor sales reached a record $120.6 billion in May 2026, rising 9.2% sequentially and 104.1% year over year, marking the 15th consecutive month. This is an ideal time to hunt for the most potent and silent winner of the semiconductor arena for August.
Investors looking to benefit from the networking chip companies benefiting from the AI boom in August 2026 should watch these stocks. Credo Technology Group Holding Ltd CRDO, Broadcom Inc. AVGO, Marvell Technology, Inc. MRVL and Astera Labs, Inc. ALAB are four such networking chip stocks that investors should be following in August.
Stocks to Watch
Credo Technology is increasingly driven by its networking portfolio, with management forecasting more than 80% revenue growth in fiscal 2027. A key catalyst is its expanding optical networking business, which is expected to generate more than $600 million in revenues during fiscal 2027. This growth will be supported by ZeroFlap optics, silicon photonics, photonic integrated circuits and optical digital signal processors (DSPs), each projected to contribute more than $100 million.
Credo’s revenues surged 157% year over year to $437 million in the fourth quarter of fiscal 2026. CRDO reported fourth-quarter fiscal 2026 non-GAAP diluted earnings per share of $1.16, which grew 12.6% year over year. The Zacks Consensus Estimate for fiscal 2027 EPS suggests a year-over-year increase of approximately 73%. The consensus mark for fiscal 2027 earnings has been revised upward over the past 30 days. Currently, CRDO sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Credo Technology Group Holding Ltd. Price and Consensus
Credo Technology Group Holding Ltd. price-consensus-chart | Credo Technology Group Holding Ltd. Quote
Broadcom is benefiting from rising AI semiconductor demand, led by custom XPUs and AI networking. In the second quarter of fiscal 2026, networking represented almost 40% of AI revenues compared with one-third of AI revenues in the first quarter. For scale-up within racks, Broadcom enables direct-attached copper based on 200G and 400G SerDes, along with co-packaged copper with Ethernet and PCI Express switches. For scale-out between racks, the company has been shipping the 100-terabit Ethernet switch, Tomahawk 6, for more than a year. Broadcom expects to tape out its next-generation 200-terabit switch in fiscal 2026.
Broadcom’s revenues rose 48% year over year to $22.19 billion in the second quarter of fiscal 2026. Broadcom reported second-quarter fiscal 2026 non-GAAP earnings of $2.44 per share, which rose 54% year over year. The Zacks Consensus Estimate for fiscal 2026 EPS suggests a year-over-year increase of approximately 72%. The consensus mark for fiscal 2026 earnings has been revised upward over the past seven days. Currently, AVGO carries a Zacks Rank #2 (Buy) and has a Growth Score of B.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
Marvell Technology is benefiting from AI-led demand across the data center end market, with custom silicon, interconnect, switching and optics driving record revenues and a higher multi-year outlook. Marvell now expects its interconnect business to grow more than 70% year over year in fiscal 2027, supported by scale-out PAM ramp-ups and growing contributions from scale-up and scale-across networking. Within optics, the company expects TIAs and drivers to exceed a $1 billion annualized run rate in the next few quarters.
MRVL’s revenues rose 28% year over year to $2.42 billion, with data center up 27% to $1.83 billion and representing 76% of sales. Non-GAAP EPS was 80 cents. The Zacks Consensus Estimate for fiscal 2027 EPS suggests a year-over-year increase of approximately 42.3%. The consensus mark for fiscal 2026 earnings has been revised upward over the past 60 days. Currently, MRVL has a Zacks Rank #3 (Hold).
Marvell Technology, Inc. Price and Consensus
Marvell Technology, Inc. price-consensus-chart | Marvell Technology, Inc. Quote
Astera Labs is benefiting from rising demand for PCIe 6 signal conditioning and AI fabric switching as hyperscalers expand rack-scale AI deployments. The growing speed requirements and system complexity of AI infrastructure continue to support Astera Labs’ connectivity roadmap. In the first quarter of 2026, ALAB’s results showed demand broadening across Astera’s PCIe Gen 6 portfolio, with Gen 6 revenue across AI fabric and signal conditioning contributing more than one-third of the company's revenue.
ALAB’s revenues totaled $308 million, up 93.4% from the year-ago quarter, while non-GAAP earnings of 61 cents per share were up 84.8% year over year. The Zacks Consensus Estimate for 2026 EPS suggests a year-over-year increase of approximately 61%. The consensus mark for fiscal 2026 earnings has been revised upward over the past 30 days. Currently, ALAB carries a Zacks Rank #3.
Astera Labs, Inc. Price and Consensus
Astera Labs, Inc. price-consensus-chart | Astera Labs, Inc. Quote
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