Astera Labs (ALAB) and GlobalFoundries (GFS) remain well positioned for artificial intelligence infrastructure growth despite near-term execution risks, Morgan Stanley said in a note Monday.

Astera Labs is scheduled to report earnings after the market closes on Tuesday. The biggest near-term driver is the anticipated H2 ramp of the Trainium 3 Scorpio switch, which is expected to support another quarter of revenue upside and higher guidance, the investment bank said.

The bank said it expects Astera Labs' revenue to grow 17.4% in Q2 sequentially and 12% in Q3, with room for modest upside as Scorpio-X shipments accelerate. This quarter, key focus areas are new design wins, customer diversification beyond Amazon, and gross margins, which could face short-term pressure from higher product investments and non-cash customer warrant expenses.

Qualcomm's (QCOM) recent results suggest a more cautious outlook for GlobalFoundries' mobile business. Qualcomm guided below consensus, partly because it expects a lower share of the iPhone 18, which could reduce GFS's RF content in Apple (AAPL) devices. Since Qualcomm accounted for 15% of GFS's revenue last year, this creates some near-term risk for GFS's smartphone segment, according to the note.

The bank said AI and manufacturing reshoring remain important focus areas, and that it will be looking for updates on customer demand in both areas later this week.

Morgan Stanley raised its price target on Astera Labs to $335 from $240, while lowering the price target on GlobalFoundries to $57 from $65.

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