Why Astera Labs Stock Is Skyrocketing Today

Key Points

• Astera Labs got a boost from bullish coverage today.

• The stock also rose in conjunction with an important macroeconomic catalyst.

• Lower interest rates could help Astera Labs keep soaring, but there is still a lot of risk on the macroeconomic horizon.

• 10 stocks we like better than Astera Labs ›

Astera Labs (NASDAQ: ALAB) stock closed out Monday with another day of big gains. The artificial intelligence (AI) company's share price was up 13% at the end of the daily session, which saw the S&P 500 rise 0.2% and the Nasdaq Composite climb 0.4%..

Astera Labs' stock has been on fire recently and is now up 223% over the last six months. The stock kept its hot streak alive today, thanks to some positive media coverage and generally bullish sentiment on the macroeconomic outlook for the broader market.

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Astera Labs keeps rallying, thanks in part to a new bullish call

Zacks Research published a report today naming Astera Labs as its "Bull of the Day" and gave it a strong-buy rating. Zacks highlighted Astera Labs' strengths in connectivity chips that allow better communication between graphics processing units (GPUs), central processing units (CPUs), and accelerators within servers.

Astera Labs has seen massive valuation growth in recent months as the demand outlook for its specialized connectivity solutions has gotten much stronger. The company appears to have a clear-cut lead in a niche tech category that could have a huge runway for long-term growth, and investors have bid up the stock in response to strong business results and guidance.

Will macroeconomic developments continue to support gains for Astera Labs?

In addition to positive coverage for the stock, the company's share price also got a boost from bullish momentum for the broader market. Investors are feeling increasingly confident that the Federal Reserve will announce a cut in interest rates later this month, and that has investors feeling more confident about growth stocks. On the other hand, weak jobs numbers and some other concerning economic indicators mean that the appeal of a lower interest rate environment has to be weighed against the possibility that a significant slowdown for the U.S. economy could be on the near horizon.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.