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Astera Labs Soars on Expanding AI Reach With Alchip, NVIDIA Deals

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Key Takeaways

  • Astera Labs posted 144% year-over-year revenue growth in Q1 2025 on strong AI product demand.
  • New Alchip partnership boosts ALAB's AI infrastructure integration and data center presence.
  • ALAB remains the only vendor with full PCIe 6 interoperability for NVIDIA's Blackwell-based systems.

Astera Labs (ALAB - Free Report) is gaining popularity as a critical enabler in the AI and cloud connectivity space, backed by strong business expansion through organic growth and expanding strategic alliances. The company reported a stellar first quarter of 2025 with revenues surging 144% year over year, driven by robust demand across its Aries, Taurus, Leo and Scorpio product families. 

ALAB’s focus on AI rack-scale connectivity, broader platform support beyond NVIDIA (NVDA - Free Report) , and leadership in PCIe 6 technology positions it well for long-term growth. ALAB’s recently announced partnership with Taiwan-based Alchip Technologies aims to accelerate AI infrastructure adoption by integrating advanced connectivity and ASIC design capabilities. This collaboration enhances Astera’s positioning across the AI value chain and underscores its growing relevance in hyperscale environments.

With shares rallying over 30% in the past three months, outpacing both the Internet-Software industry and the S&P 500, Astera Labs is fast becoming a standout in next-gen AI infrastructure.

Three-Month Price Performance

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Strengthening Market Reach Through Strategic Collaborations

Astera Labs is sharpening its competitive edge through a series of strategic collaborations that bolster its presence across the AI and cloud infrastructure ecosystem. Yesterday, the company announced a partnership with Alchip Technologies, combining its intelligent connectivity solutions with Alchip’s high-performance ASIC design expertise. This collaboration aims to streamline AI infrastructure deployment by delivering integrated, interoperable solutions tailored to the growing complexity of data center workloads.

Collaborations with ecosystem leaders like Wistron further expand Astera Lab’s reach into OEM and modular platforms. In addition, Astera continues to deepen its collaboration with NVIDIA, playing a pivotal role in the rollout of Blackwell-based MGX systems. Astera remains the only connectivity provider to demonstrate complete end-to-end PCIe 6 interoperability with NVIDIA’s next-generation GPUs—a milestone that underscores the company’s technical leadership and trusted ecosystem role.

In this regard, we should also note that Astera Lab’s leading competitor Marvell Technology (MRVL - Free Report) has also partnered with NVIDIA on NVLink Fusion. The partnership is aimed at tightly integrating Marvell’s custom silicon with NVIDIA’s rack-scale architecture, delivering a 1.8 TB/s bidirectional bandwidth. At OFC 2025, Marvell showcased the first end-to-end PCIe Gen 6-over-optics solution, enabling 10-meter optical links optimized for AI server scale-up environments.

Estimates for ALAB and Valuation

The Zacks Consensus Estimate for Astera Lab’s 2025 earnings implies a 60.7% improvement year over year.

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Astera Labs is presently trading at a forward 12-month price-to-sales of 18.63X, which is below its 1-year median of 19.90X. However, it remains overvalued compared to the industry.

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ALAB currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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