Edinburgh Worldwide enlightenment: Astera Labs

As with any investment, your capital is at risk.

Imagine an enormous datacentre buzzing with thousands of powerful computers training AI models. Despite their capabilities, these machines often sit idle, waiting for data – like cars stuck in traffic. Edinburgh Worldwide (EWIT) holding Astera Labs tackles this issue head-on. Its specialised chips serve as the highways and traffic lights of data centres, keeping information flowing swiftly and smoothly between processors. In simple terms, Astera ensures data bottlenecks don’t slow down AI performance.

Riding a historic wave

Investment in AI data centres is booming. Companies like Amazon, Google, and Microsoft are building massive graphics processing unit (GPU)-powered facilities to support the surging AI industry. McKinsey estimates that the cumulative investment could reach $8 trillion by 2030, which is comparable to Germany’s annual Gross Domestic Product and double the US defence budget. As data centres scale to millions of GPUs, connectivity and data networking will become more critical, boosting demand for Astera’s products.

Competitive edge

Astera addresses the challenge of swiftly moving vast amounts of data within AI systems. Traditional methods were never designed for today’s workloads. Astera’s chips act as signal amplifiers – enabling long-distance data travel without quality loss and ensuring smooth communication between central processing units (CPUs), GPUs, and storage systems.

We’re encouraged by the founder-led management’s ability to broaden the product line and deepen customer relationships. For example, the new Scorpio switches can significantly enhance data flow in data centres. Co-founder and CEO Jitendra Mohan explains, “We work alongside our customers to address evolving AI challenges, ensuring they stay ahead.” These innovations boost performance, strengthen partnerships, and reinforce Astera’s competitive edge.

Astera Labs has rapidly distinguished itself in a market long dominated by Broadcom and Marvell. By directly addressing AI demands with specialised rather than general-purpose products, it has become the partner of choice for major tech firms. Its targeted, agile approach has led to widespread adoption and a central role in the expanding AI datacentre market.

Finally, Astera’s Cosmos software platform provides customers with remote monitoring and management capabilities for their hardware. This combination of specialised hardware and powerful software creates a deeper connection with customers, making Astera’s solutions particularly difficult to replace, and further strengthens Astera’s moat against its rivals.

Improving profits

Astera’s growth is striking – revenues rose from $80 million in 2022 to nearly $400 million in 2024, with gross margins around 75%. After heavy reinvestment, the company turned profitable in early 2025, posting an operating margin above 30%.

The global AI infrastructure boom supports Astera’s broad growth potential. It targets demand for custom AI racks and datacentre upgrades – an estimated $12 billion market by 2028. Analysts forecast annual revenue growth of 40–50% through to 2029. If execution is strong, Astera could surpass these expectations.

Aligned to EWIT’s strategy

Astera Labs is central to the AI revolution, delivering essential technologies that maximise computing power. Its founder-led innovation has disrupted incumbents and secured a lasting edge, positioning the company for scalable, long-term growth.

As such, Astera aligns closely with EWIT’s focus on early-stage growth investments, and we were excited to initiate a position in Q2 2025.

Past performance

Edinburgh Worldwide Investment Trust plc - Annual discrete performance to 31 March

Source: Morningstar, S&P. Total return in sterling. *S&P Global Small Cap Index.

Past performance is not a guide for future returns.

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