The artificial intelligence (AI) boom is creating opportunities beyond tech giants. Astera Labs (NASDAQ: ALAB), Credo Technology Group (NASDAQ: CRDO), and Sanmina (NASDAQ: SANM) are three promising companies benefiting from rising AI spending. None of the three was added to the S&P 500 in September, and the next rebalance should take effect Dec. 21.
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To be included in the S&P 500, a company requires a market capitalization of at least $22.7 billion and positive earnings. If AI spending continues to drive massive growth, these stocks could emerge as future S&P 500 candidates, potentially rewarding investors who get in early.
Astera Labs, the largest of the three by market value, comes first.
1. Connectivity chips are driving Astera Labs’ rapid growth
Astera Labs develops connectivity solutions that move data between chips, memory, and other components in AI systems. As these systems become more complex, the connections between them can become a bottleneck. Astera’s products are addressing that challenge. The company is already expanding beyond its established connectivity products.
Its Scorpio fabric switches help connect large numbers of AI chips, while its optical connectivity and custom solutions offer greater opportunities as AI data centers evolve.
With Astera, investors demand solid growth, as evidenced by the stock’s forward price-to-earnings (P/E) ratio of almost 45 times. But the results are already showing up in earnings.
Astera has also attracted attention as a potential S&P 500 addition; in fact, its $45 billion market cap already clears S&P’s $22.7 billion minimum. The main risk, however, is that its growth depends heavily on AI spending, while competition and changing connectivity standards could challenge its position.
Meanwhile, another company is tackling the broader challenge of moving data across advanced AI data centers.
2. Optical products could widen Credo’s reach in AI data centers
Credo develops high-speed connectivity products spanning copper and optical solutions, helping customers move data reliably across AI infrastructure. Its portfolio includes active electrical cables, optical digital signal processors, and other networking products.
One of the most interesting developments is Credo’s expansion into optical connectivity. Although copper is useful for short-distance connections, optical technology can become more attractive as data rates and transmission distances grow. This gives the company broad exposure to various networking hardware used in AI data centers.
