RBC Projects Semiconductor Revenue from AI to Exceed $550 Billion by 2028
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 15 2026
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Source: seekingalpha
- Market Growth Outlook: RBC Capital Markets anticipates semiconductor revenue from AI applications to surge from $220 billion in 2025 to over $550 billion by 2028, indicating robust market potential that will drive investments and R&D in related companies.
- Supply Chain Challenges: Analysts noted that tight supply has led management to highlight 18-month backlogs, and while infrastructure constraints may delay some projects, they could ultimately help smooth the AI spending cycle, positively impacting long-term industry growth.
- High Bandwidth Memory Demand: The demand for high-bandwidth memory is expected to be a key driver, with Pajjuri noting that AI workloads are shifting towards reinforced learning and distributed inferencing, which are memory-intensive, leading to a forecast of memory demand outpacing supply until 2027.
- Equipment Investment Outlook: RBC also predicts strong spending on wafer fabrication equipment over the next two years, with technology trends such as back-side power, advanced packaging, and 3D structures expected to drive the equipment market to grow at least at a high single-digit rate, further enhancing the semiconductor industry's investment appeal.
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Analyst Views on ALAB
Wall Street analysts forecast ALAB stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ALAB is 191.54 USD with a low forecast of 80.00 USD and a high forecast of 225.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
12 Buy
4 Hold
0 Sell
Strong Buy
Current: 167.900
Low
80.00
Averages
191.54
High
225.00
Current: 167.900
Low
80.00
Averages
191.54
High
225.00
About ALAB
Astera Labs, Inc. is a global semiconductor company. The Company provides semiconductor-based connectivity solutions for cloud and artificial intelligence (AI) infrastructure. It has developed and deployed its Intelligent Connectivity Platform built from the ground up for cloud and AI infrastructure. Its Intelligent Connectivity Platform provides its customers with the ability to deploy and operate high-performance cloud and AI infrastructure at scale, addressing an increasingly diverse set of requirements. It provides its connectivity products in various form factors, including Integrated Circuits (ICs), boards, and modules. Its PCIe, CXL and Ethernet semiconductor-based connectivity solutions are purpose-built to unleash the potential of accelerated computing at cloud-scale. The Company’s products include Aries products, which include its COSMOS software suite; Taurus products, which are hardware modules based on its Taurus ICs; Leo products; and Scorpio products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Analysis of Semiconductor Market Dynamics
- Intel Earnings Disappointment: Intel (INTC) reported Q4 2025 revenue of $13.7 billion, down 4% year-over-year, with Q1 revenue guidance of $11.7-$12.7 billion falling short of expectations, leading to a significant stock price drop and negative investor sentiment.
- Coupang Data Breach Impact: Coupang (CPNG) faces regulatory scrutiny and class-action lawsuits due to a major data breach last year, and despite the overall Korean market rising 20%, the company's stock has suffered, raising concerns about its risk management capabilities.
- Astera Labs Strong Growth: Astera Labs reported record revenue of $230.6 million in Q3 2025, up 20% sequentially and 104% year-over-year, indicating robust demand in data center and AI applications, which enhances market confidence in its future growth.
- Monolithic Power Systems Strong Performance: Monolithic Power Systems (MPWR) achieved Q3 2025 revenue of $737.2 million, up 18.9% year-over-year, and raised its Q4 revenue guidance to $730-$750 million, reflecting strong growth across all end markets.
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Astera Labs Expands Scorpio X-Series, Anticipates $20B Market Opportunity by 2030
- Product Line Expansion: Astera Labs announced updates to its Scorpio X-Series, increasing radix support for varied cluster sizes, enabling hyperscalers to optimize specific workloads, thereby enhancing market adaptability and competitiveness.
- Technological Innovation: The new series will feature protocols designed for specific hyperscaler platforms, eliminating integration barriers and enabling seamless deployment into hybrid AI infrastructures, which is expected to significantly enhance client efficiency and infrastructure optimization capabilities.
- Performance Enhancement: By introducing in-network computing, data-intensive tasks will move directly from GPUs to the fabric switch, boosting performance, while new technologies like hypercast and optical connectivity will support multi-rack deployments to meet the growing GPU demand.
- Market Outlook: Astera Labs anticipates the scale-up switching market will reach $20 billion by 2030, indicating the company sees substantial market opportunities in the rapidly evolving AI sector and plans to accelerate development of the Scorpio X-Series to meet market demands.
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