Motley Fool analysis flags three AI infrastructure plays to outpace Nvidia in 2027

A financial analysis published on 18 July 2026 by The Motley Fool, via Yahoo Finance, suggests that Monolithic Power Systems, Astera Labs, and Cadence Design Systems present better investment opportunities than Nvidia for 2027. The report argues that while Nvidia has experienced significant growth, its 11 per cent year-to-date return is "pedestrian" compared to the selected stocks, which have outperformed it due to their critical roles in AI infrastructure: power management, connectivity hardware, and electronic design automation.

Monolithic Power Systems has rallied more than 40 per cent year-to-date, driven by demand for data centre power management systems that maintain uptime and manage heat alongside liquid-cooling solutions. The company reported a 26.1 per cent year-over-year increase in first-quarter revenue, with net income growing at a faster rate. Its enterprise data segment, which accounts for approximately one-third of sales, nearly doubled year-over-year, while its communications segment saw top-line growth of 55.5 per cent year-over-year.

Astera Labs, which creates rack-scale connectivity hardware and software for AI servers, has seen its stock almost double this year, despite a recent pullback of roughly 33 per cent from its peak. First-quarter sales almost doubled year-over-year, reaching $308.4 million and exceeding guidance of $297 million. Management has set a second-quarter revenue guidance midpoint of $360 million, implying 16.7 per cent sequential growth, though the company suggests actual growth may be closer to 20 per cent.

Cadence Design Systems provides electronic design automation software and hardware for chipmakers, including Nvidia and Advanced Micro Devices, to test and build semiconductors. The stock is up almost 20 per cent year-to-date and holds a record $8 billion backlog. The company expects 17 per cent revenue growth for 2026 and is positioned to benefit from "Agentic AI" trends, which require more rigorous chip workloads and make its technology a key checkpoint for advanced AI chip design.

The Motley Fool, which holds positions in several of the mentioned companies including Cadence Design Systems, Nvidia, and Astera Labs, notes that these firms are well positioned to extend their rallies. The analysis highlights that the specific infrastructure roles played by these three companies have allowed them to outgain Nvidia so far this year, suggesting they are poised to outperform the chip giant in the coming year.