ALAB Benefits From Expanding Partner Base: A Sign for More Upside?

Astera Labs ALAB is benefiting from a rich partner base, which positions the company for significant upside in the rapidly evolving AI infrastructure market. It includes collaborations with industry leaders, such as NVIDIA, Advanced Micro Devices, Micron Technology, Alchip Technologies, and Intel.

ALAB’s increasing demand for AI platforms, particularly those leveraging high-performance GPUs and AI accelerators, drove strong design wins and sales for products like Aries Retimers, Taurus Smart Cable Modules, and Scorpio Fabric Switches.

ALAB is advancing next-generation data center infrastructure with the introduction of a PCIe 6-ready reference design based on NVIDIA Blackwell-based MGX platform that leverages Scorpio Smart Fabric Switches for AI and cloud infrastructure. Astera Labs has showcased the first end-to-end PCIe 6 interoperability with NVIDIA’s Blackwell GPU and Micron’s NVMe SSD, with both Aries 6 PCIe Smart Retimer and Scorpio-P PCIe SmartFabric Switch.

In June 2025, the company announced a partnership with Alchip Technologies to advance the silicon ecosystem for AI rack-scale infrastructure. By combining Astera Labs’ comprehensive connectivity portfolio with Alchip’s custom ASIC development capabilities, the collaboration aims to deliver optimized solutions for hyperscalers and AI platform providers.  This partnership shows Astera Labs' dedication to building an open and scalable AI infrastructure ecosystem.

Astera Labs is also a key promoter of the UALink standard, which has gained significant traction as an open, memory-semantic-based scale-up connectivity solution. The company’s involvement in the UALink consortium, alongside major players like AMD, positions it to capitalize on the growing adoption of open standards in AI infrastructure.

ALAB Suffers From Stiff Competition

ALAB is facing stiff competition from other industry players, such as Broadcom AVGO and Credo Technology CRDO, which are also making strong efforts to strengthen their connectivity portfolios, secure hyperscaler partnerships, and accelerate adoption of next-generation AI infrastructure solutions.

Broadcom recently expanded its partnership with Lloyds Banking Group through a multi-year agreement. The goal is to improve resilience, flexibility, and scalability with VMware Cloud Foundation and mainframe solutions. This deal shows how Broadcom is establishing itself as an important player in helping businesses transform digitally in the era of AI-driven infrastructure.

Credo Technology is seeing strong demand from hyperscalers and data center operators as AI infrastructure investment grows. Credo Technology focuses on providing improved connectivity solutions for Ethernet and PCIe applications. This includes partnerships like its collaboration with Microsoft to create reliable dual-Top-of-Rack network architectures for data centers.

ALAB’s Share Price Performance, Valuation, and Estimates

ALAB shares have risen 88.3% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 20.4%. The Zacks Internet - Software industry has returned 24.2% in the same time frame.

ALAB Stock Performance

ALAB stock is trading at a premium, with a forward 12-month Price/Sales of 44.50X compared with the  Internet - Software industry’s 5.87X. ALAB has a Value Score of F.

Price/Sales (F12M)

The consensus mark for 2025 earnings is pegged at $1.58 per share, which remained unchanged over the past 30 days, suggesting 88.10% year-over-year growth.

Astera Labs, Inc. Price and Consensus

Astera Labs, Inc. price-consensus-chart | Astera Labs, Inc. Quote

Astera Lab currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research