ALAB Benefits From Strong UALink Growth: Will the Momentum Continue?

Astera Labs ALAB is benefiting from strong growth in UALink, an open standard scale-up connectivity protocol designed to address the increasing demands of AI infrastructure. UALink combines the memory semantics of PCIe and the fast speed of Ethernet, but is devoid of the software complexity and performance limitations of Ethernet.

The company has experienced strong customer activity surrounding UALink. Several top hyperscalers and AI platform providers are currently involved in the RFP (Request for Proposal) and RFQ (Request for Quotation) stages to match their designs and applications with UALink’s capabilities. 

UALink’s ability to support higher bandwidth and ultra-low latency makes it ideal for scaling AI clusters.  Astera Labs is leveraging its flexible fabric architecture and hands-on experience with scale-up networks to develop UALink products that meet diverse customer needs.  This positions the company to capture a significant share of the growing AI infrastructure market, which is forecasted to see hyperscaler CapEx surpass $500 billion by 2026.

The adoption of UALink is expected to be meaningfully additive to Astera Labs’ PCIe scale-up revenues, providing a significant growth opportunity. ALAB expects to deliver UALink solutions in 2026 to solve scale-up connectivity challenges for next-generation AI infrastructure. The growing proliferation of UALink is expected to be a multibillion-dollar additional market opportunity for Astera Labs by 2029.

ALAB Suffers From Stiff Competition

Astera Labs is facing stiff competition from other industry players, such as Broadcom AVGO and Marvell Technology MRVL, which are also making strong efforts in the AI infrastructure market.

Broadcom is benefiting from strong demand for its networking products and custom AI accelerators. Broadcom’s AI revenue grew 65% year over year in fiscal 2025, reaching $20 billion. This growth is driven by AI semiconductors and infrastructure software, with AI revenue expected to double year over year to $8.2 billion in the first quarter of fiscal 2026.

Marvell Technology’s expanding portfolio has been noteworthy. In December 2025, Marvell Technology announced broad industry adoption of its Alaska P PCIe 6 retimer family, enabling low-power, high-speed, low-latency connectivity across AI accelerators, GPUs, CPUs, SSDs, and CXL devices in advanced data centers. The 5nm PAM4-based retimers support 64 GT/s PCIe 6 links, compensating for up to 40 dB channel loss while scaling AI compute fabrics within servers, racks and clusters.

ALAB’s Share Price Performance, Valuation, and Estimates

ALAB shares have risen 91% in the past six-month period, outperforming the broader Zacks Computer & Technology sector’s return of 19.5%. The Zacks Internet - Software industry has declined 7.6% in the same time frame.

ALAB Stock's Performance

ALAB stock is trading at a premium, with a forward 12-month Price/Sales of 24.77X compared with the  Internet - Software industry’s 4.71X. ALAB has a Value Score of F.

ALAB's Valuation

The Zacks Consensus Estimate for 2025 earnings is pegged at $1.78 per share, unchanged over the past 30 days. This suggests 111.90% year-over-year growth.

Astera Labs, Inc. Price and Consensus

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

Astera Labs 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