Beyond the Foundry: 5 Infrastructure Stocks Tackling the AI Bottlenecks

Key Points

• AI infrastructure bottlenecks in networking, cooling, and power have created lucrative niches for companies like Arista Networks, Vertiv, Astera Labs, Corning, and Constellation Energy.
• Each company holds a strong competitive position through specialized technology, entrenched customer relationships, or scale.
• All five stocks carry consensus Buy or Moderate Buy ratings from analysts, with price targets suggesting notable upside.

AI is all about speed, specifically the speed of parallel computing power enabled by GPUs.

However fast a GPU is, however much computing power a cluster can deliver, there are numerous bottlenecks that hinder AI performance. A single GPU may be fast, but the system only runs as fast as its connections, and there are exponentially more connections as you move up the chain, each with more networking, power, and cooling requirements. Together, those constraints create a lucrative infrastructure market with numerous niches to fill.

Arista Networks: Leader in Hyperscale Ethernet Fabrics

Arista Networks NYSE: ANET supplies the switching and networking architecture that allows AI clusters to move data efficiently as they scale.

The company’s optical interconnects are critical for speed, but the Ethernet fabrics truly matter.

Ethernet fabrics are complex, smart-routing systems absolutely critical for advanced computing. They act as the AI nervous system, routing signals efficiently, with low latency and high bandwidth, enabling ultra-efficient hardware usage, which is critical for scaling.

Arista Networks is a leading hyperscale Ethernet supplier due to its positioning. Hyperscalers have spent years and billions of dollars building systems that utilize ANET products, specifically its moat-enabling software stack; switching now will cost them billions in additional capital and lost momentum. As it stands, ANET is well-positioned as industry standards favor it for superior scalability.

Analysts rate this stock a consensus Buy, and price target trends are driving the market higher, pushing it to new highs as of mid-July.

Vertiv: The Cool Leader in a Smoking Hot Market

Heat is a major constraint for AI, posing more than just a performance threat. Overheating literally kills AI by throttling performance, triggering shutdowns, and damaging data-center equipment.

Vertiv NYSE: VRT sits at the center of this challenge, combining power management, distribution, and full-stack liquid cooling to keep high-density data centers operating safely and reliably.

The company's co-development with GPU and infrastructure providers like NVIDIA, full-service/full-stack capability, maintenance services, and scalability give Vertiv a strong competitive position.

Vertiv is a global leader in data-center power distribution and thermal management. Its backlog has swelled to $15 billion, providing immense visibility into its future, and it is profitable.

The stock has a consensus Moderate Buy rating, with 23 of the 28 analysts covering it assigning it a Buy or Strong Buy. The data shows a bullish bias, with the consenus price target implying more than 12% upside from current levels. Some price targets are even pointing toward the $500 range, well above existing highs.

Astera Labs: Boosting the Integrity of AI Across Data Center Environments

Astera Labs NASDAQ: ALAB accelerates data movement across AI systems with retimers that restore signal integrity over longer distances and switches that manage high-speed connections.

The combination of specialized hardware and software entrenches the company within hyperscaler networks, creating a significant moat.

As it stands, the company holds an estimated 90% of the retimer market, boasts more than 70% gross margins, and is accelerating design wins.

Unlike other hardware providers, ALAB products are critical scale-up connections within servers and are included in generational manufacturing designs.

Analysts rate Astera Labs a consensus Moderate Buy, and price target revisions in the $450-$460 range imply approximately a 20% upside from where the stock is currently trading.

Corning: Enables Light Speed Data Transfers

Corning NYSE: GLW provides the fiber-optic backbone for AI infrastructure, using proprietary glass technologies and manufacturing scale to support fast, reliable data transmission between servers, racks, and data centers.

Performance drivers today include scale-out dynamics, such as server-to-server and rack-to-rack connections, and long-term drivers include moves into co-packaged optics and photonics. Those will take fiber optics into the very heart of GPUs, enabling even faster speeds.

Corning’s moat is built on its IP, customer relationships, and multiyear supply agreements, which provide long-term visibility for investors.

The 16 analysts who cover Conring have given it a consensus Moderate Buy rating, with the highest price target revision coming in at $270.

Constellation Energy Is the Heartbeat of AI

If AI is Frankenstein’s monster, waiting for the jolt of electricity to power it up, then Constellation Energy NASDAQ: CEG is the heartbeat.

Following its acquisition of Calpine, Constellation is the world’s largest private-sector power producer and sells electricity and related energy products to wholesale and retail customers

The company supplies the around-the-clock generation to make large data centers work. Constellation is absolutely critical to AI because local power grids are insufficient to meet AI's load.

The company has numerous agreements across the hyperscale and enterprise AI universe (such as with Microsoft NASDAQ: MSFT and Meta Platforms (NASDAQ: META)) for power supply and co-located power generation.

Projects include the restarting of mothballed nuclear facilities and billions in new project proposals.

The 23 analysts who cover Constellation Energy have given the stock a consensus Moderate Buy rating, with more than 40% potential upside at the consensus price target.

The trend is bullish, suggesting a move to the high-end target of $462 is possible, which would nearly double the upside potential.