Investing in growth stocks isn't like betting on horses. Here's one new trade idea from Todd Gordon

Todd Gordon is delaying planned growth-portfolio additions after a stronger-than-expected nonfarm payrolls report and a sharp selloff in growth stocks, including semiconductors down more than 6% in one session and the Nasdaq posting its worst week since April 2025. He is waiting for confirmation that the market and growth trade are carving out a low before increasing technology exposure from 23.5% to 39.5%, with 9 of 12 new positions in tech. Astera Labs (ALAB) is highlighted as a pure AI infrastructure play, with Q1 2025 revenue up 93% year over year to $309 million and analysts forecasting revenue of $1.546 billion in 2026 and $2.194 billion in 2027.

Analysis

The key signal is not just that growth sold off; it’s that the market is starting to price a higher-for-longer macro regime into the most duration-sensitive corners of tech. That matters because AI infra beneficiaries with real revenue now can outperform the broader “growth” basket, but only if the tape stops punishing multiple expansion and the rate backdrop stops worsening. In other words, this is a stock-selection market, not a clean beta market, and the first money is likely to rotate from the most crowded software/long-duration names into hardware, picks-and-shovels, and balance-sheet-quality compounders.

ALAB is interesting because it sits in the narrow zone where fundamentals and narrative still reinforce each other: high growth, high gross margin, and direct exposure to hyperscaler capex. The second-order issue is positioning — if investors are using ALAB as a pure AI proxy, it can get hit indiscriminately during de-risking, but it should also recover faster than more speculative AI names once the selloff exhausts because earnings are scaling into the valuation. The main risk is not company execution; it’s that the market may demand a lower multiple on all semi infrastructure names if rate expectations keep moving up, which can offset strong operating momentum for several months.

The constructive setup would be a stabilization signal near the 50-day or prior breakout zone, because that would tell us the market is absorbing the macro shock rather than repricing the whole growth complex lower. If that happens, the likely leadership should come from liquid, profitable AI infrastructure names with visible 12-18 month revenue inflection, while weaker balance-sheet growth names and high-multiple software should lag. The contrarian takeaway is that the selloff may be less about “AI is over” and more about a temporary clearing event in crowded positioning, which often creates a better forward entry than chasing strength after the first rebound.

Key Decisions for Investors

• Add ALAB only on confirmation: scale in 25% size on a stabilization close above the 20-day/50-day area; add the rest only if breadth improves. Risk/reward favors a 3:1 setup if the stock resumes leadership, but invalidates quickly if semis lose relative strength again.
• Pair trade: long ALAB / short a lower-quality, higher-burn AI beneficiary basket for 1-3 months. The thesis is that the market will continue rewarding current monetization and punishing purely narrative AI exposure.
• Use the Nasdaq 100 or SMH as a tactical hedge against any ALAB long until the macro tape settles. If rates reprice higher, this reduces factor risk while keeping single-name alpha exposure.
• If growth weakens further into the 50-day, buy 1-2 month call spreads on ALAB rather than stock. This limits downside if the macro washout deepens while preserving upside if the selloff is just positioning-driven.
• Do not chase a one-day rebound in ALAB or semis unless breadth confirms. The better entry is after a failed bounce or successful retest, where downside is defined and the probability of a multi-week trend reversal is materially better.