CNBC’s Jim Cramer gave investors his take on the valuation of Astera Labs, a company that went public last week and sells data center connectivity chips to cloud and artificial intelligence outfits. To Cramer, the stock debuted too hot and is more expensive than it should be at this point.

“While Astera Labs has a good story — and it is good, I think it’d be worth owning at some price — I think it’s way too expensive at this price,” he said. “Why pay through the nose for Astera when you can own Broadcom, something very similar, for much, much cheaper? In the end, I don’t want you paying up for these smaller AI plays when the most direct beneficiaries are far less expensive.”

Last week, Wall Street was buzzing about Reddit‘s long-awaited initial public offering, but Cramer found Astera Labs to be intriguing. The hardware company hit the market at around $52 per share last Wednesday, and it closed Monday at $85, up 21.43% for the session. Cramer said this rally has been profitable for investors already involved, but the action tells him the stock is “probably already overheated.” This kind of heat on the IPO market means there could be too much speculation, which usually precedes a big downturn, Cramer said.

However, Cramer said he felt positive about some aspects of the business, saying if Astera Labs can keep putting up sales growth, it’s headed in the right direction. The company stands to benefit as many data centers start to rebuild to accommodate the advanced computing needed for new AI technology, he conceded.

But Cramer took issue with one analyst who pointed to Astera Labs’ earnings potential several years down the line, saying it’s too early to rely on projections so far in advance.

“Even if we accept that Astera has the best connectivity technology, we don’t know how protected they are from competition,” he said. “Who knows if somebody else will come up with something better a year or two down the road?”

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Broadcom.