ALAB Benefits From Strong Connectivity Demand: A Sign for More Upside?

Astera Labs ALAB is rapidly expanding its portfolio to address the growing demands of AI infrastructure and connectivity solutions. It benefits from strong demand for its PCIe solutions, which have also been a major growth driver.

Building on this momentum, the company recently announced plans to deliver custom connectivity solutions designed for the complex needs of next-generation AI infrastructure. After entering the NVIDIA NVLink Fusion Ecosystem in May 2025, the company is working with hyperscalers to support NVLink connectivity. 

These custom solutions expand ALAB’s standards-based Intelligent Connectivity Platform, allowing for diverse, high-performance rack-scale systems. Using its COSMOS software-defined architecture and new photonic chiplet features, ALAB aims to provide a complete offering for standard, custom, and hybrid AI deployments.

Astera Labs’ product portfolio, including Scorpio, Aries, and Taurus, has been a key catalyst. The Scorpio P-Series fabric switches have seen robust demand, particularly for PCIe Gen 6 scale-out applications, with new design wins across multiple hyperscaler customers and AI platforms.  

The Aries PCIe 6 smart retimer solutions contributed more than 20% of third-quarter 2025 revenues, highlighting the company’s leadership in the connectivity space.  Additionally, Taurus smart cable modules have experienced strong growth, with 400-gig solutions driving demand and 800-gig solutions expected to create new growth opportunities in 2026.

ALAB Suffers From Stiff Competition

Astera Lab is facing stiff competition from other industry players, such as Broadcom AVGO and Marvell Technology MRVL, which are also making strong efforts in the connectivity space.

Broadcom is expanding its footprint in the PCIe retimers market by developing advanced solutions that enhance signal quality and extend the reach of PCIe connections in high-speed data environments. Broadcom’s launch of PCIe Gen 6 portfolio, featuring high-port switches and retimers tested for interoperability with partners like Micron and Teledyne LeCroy, is a noteworthy development.

In October 2025, Marvell Technology expanded its connectivity portfolio by introducing active copper cable (ACC) linear equalizers that extend reach and efficiency for in-rack AI interconnects while maintaining low cost, power, and latency. Built on Marvell Technology’s PAM4 expertise, the new ACCs support 800G and 1.6T copper links, delivering superior gain versus competing solutions and strengthening Marvell’s scale-up interconnect offerings.

ALAB’s Share Price Performance, Valuation, and Estimates

ALAB shares have risen 54.9% in the past six-month period, outperforming the broader Zacks Computer & Technology sector’s return of 22.1%. The Zacks Internet - Software industry has declined 5.2% in the same time frame.

ALAB Stock Performance

ALAB stock is trading at a premium, with a forward 12-month Price/Sales of 21.28X compared with the  Internet - Software industry’s 4.75X. ALAB has a Value Score of F.

ALAB Valuation

The consensus mark for 2025 earnings is pegged at $1.78 per share, unchanged over the past 30 days, suggesting 111.90% year-over-year growth.

Astera Labs, Inc. Price and Consensus

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

Astera Lab currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) 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