Applied Materials vs. Intel: Which Tech Stock Is a Better Buy in 2026?
Key PointsApplied Materials holds a dominant position in providing the essential equipment used to manufacture the world's most advanced chips.
Astera Labs Inc (NASDAQ:ALAB) and Applied Materials Inc (NASDAQ:AMAT) are major players in the high-performance computing landscape, each offering distinct services in the realm of data centers. Astera Labs specializes in internal data center plumbing, supplying chips that facilitate data transfer between processors. In contrast, Applied Materials equips the very machines that produce these crucial chips.
Both companies have a stake in artificial intelligence, but they operate on different levels of the technology hierarchy.
Astera Labs' offerings include PCIe and Ethernet solutions tailored for AI-intensive data centers. Their primary products cater to hyperscale cloud providers, enabling them to handle massive data workloads efficiently. However, the company's reliance on a single customer, which accounted for over 70% of its revenue in the fiscal year ending December 31, 2025, presents a notable risk.
This customer concentration could potentially impact the company's financial stability if the relationship were to sour or if the customer's business faced difficulties.
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