ALAB Stock Shines as AI Infrastructure Ties With NVIDIA Deepen

Astera Labs ALAB is gaining market as a critical enabler of next-generation AI and cloud infrastructure, driven by its expanding portfolio of high-performance connectivity solutions. In the first quarter of 2025, revenues surged 144% year over year, banking on strong demand across its Aries, Taurus, Leo and Scorpio product lines.

Historically known for its Aries PCIe retimers supporting NVIDIA AI servers, Astera Labs has rapidly expanded its portfolio to now encompass full-rack solutions, including Scorpio Fabric Switches, Aries 6 Retimers and Smart Gearboxes, Taurus Ethernet modules and Leo CXL controllers designed to address both scale-up (intra-server, accelerator cluster) and scale-out (inter-server, data center-wide) connectivity challenges. The company’s COSMOS software suite further enhances this hardware synergy, enabling advanced diagnostics, fleet observability and performance optimization.

Additionally, the company has expanded its strategic collaboration with NVIDIA NVDA to support the NVLink Fusion ecosystem for Blackwell-based MGX platforms and has stepped up as a promoter member and board participant in the UALink Consortium, helping to advance open, high-performance interconnect standards for accelerator-rich AI clusters.

AMD and QCOM — Two Other Prominent Players Working in This Niche

Advanced Micro Devices AMD: The company’s expanding portfolio of EPYC CPUs and Instinct GPUs is aligned with the PCIe 6.0 standard, which is becoming foundational in next-generation AI infrastructure. As data center and AI rack architectures migrate toward PCIe 6.0 to meet rising bandwidth and latency demands, AMD’s adoption of this standard is indirectly fueling demand for high-speed interconnect solutions like those offered by Astera Labs.

Qualcomm QCOM: Qualcomm is making a bold move into the AI data center connectivity space with its recent $2.4 billion acquisition of Alphawave, a company specializing in high-speed connectivity IP. This strategic acquisition signals Qualcomm’s intention to become a more prominent player in AI infrastructure, a domain where Astera Labs is already deeply entrenched. Additionally, Qualcomm is now partnering with NVIDIA in the NVLink Fusion initiative, placing it in direct competition with companies like Astera Labs that are focused on enabling high-bandwidth, low-latency interconnects for AI racks.

ALAB's Price Performance and Valuation

Astera Labs has rallied 32.9% in the past three months compared with the industry's 15.8% growth and the sector’s 12.3% rise. The S&P 500 index, meanwhile, has improved 7.9% during the said period.

Share Price Comparison: ALAB

Astera Labs is presently trading at a forward 12-month price-to-sales of 19.02X, which is below its 1-year median of 19.95X. However, it remains overvalued compared to the industry.

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

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