Astera Labs (ALAB) Stock Plummets After AMD-Oracle AI Deal

15 October 2025

Stock price: $161.55 (Oct 15 close), down ~19% from $199.53 on Oct 13; volume ~17.3M; market cap ~$26.9B ^[1] ^[2].
Catalyst: AMD’s Oct 14 announcement of a 50,000-GPU deployment deal with Oracle sent ALAB tumbling ~19% ^[3]. Investors fear tighter AMD-cloud integrations could cut into Astera’s PCIe connectivity business ^[4].
Analyst outlook: Consensus remains bullish – 14 buys vs 4 holds, avg. price target ~$187 (≈+16% upside) ^[5]. Citi reiterated a Buy (street-high $275 PT) citing Astera as a leader in “open AI networking” ^[6]. BofA (Neutral, $230 PT) notes the AI infrastructure race is “intensifying” but Astera is “well positioned” for demand in PCIe/UALink chips ^[7].
Earnings & guidance: Q2 2025 revenue was $191.9M (+150% YoY) with EPS $0.44 ^[8]. Record cash flow and a $1.07B cash balance were reported. Q3 revenue is guided ~$203–210M ^[9] (6–9% sequential growth), driven by volume production of its new PCIe 6 “Scorpio” switches.
Partnerships & tech: Astera is emphasizing open-standard AI connectivity. At the Oct 13 OCP Summit it showcased rack-scale demos (PCIe, UALink, CXL, Ethernet) and broad collaborations (GPUs, CPUs, cables, ODMs, management software) ^[10] ^[11]. On Oct 14 it joined Arm’s Total Design ecosystem to integrate its connectivity platform with Arm’s Neoverse CPUs ^[12]. AMD’s Danny Moore (AI Tech Dir.) noted the Astera-AMD UALink work ensures GPUs can be deployed “at scale in open rack architectures” ^[13].

Astera’s stock has been volatile on recent AI infrastructure news. After surging on an earlier AMD/OpenAI deal – Citi analysts noted Astera’s shares “popped 10%” after that announcement ^[14] – the Oct 14 AMD-Oracle GPU deal triggered a sharp pullback ^[15]. The sell-off reflects renewed competition concerns: Morgan Stanley warned Nvidia’s NVLink could eventually “replace the traditional PCIe connection” between CPU and GPU, directly threatening Astera’s core business ^[16]. Astera has countered by stressing open standards. Analyst Patrick Moorhead (Moor Insights) observes that “open standards are critical” for next-generation AI rack architectures ^[17], while Astera’s CEO Sanjay Gajendra emphasizes the need to “collaborate, standardize, and accelerate” innovation ^[18].

Financially, Astera remains strong. Its Aug 5 Q2 results beat estimates: revenue $191.93M vs. $172M expected, and EPS of $0.44 vs. $0.33 expected ^[19]. Cash flow was robust, supporting the $1.07B cash on hand. ^[20] The company’s networking products (retimers, switches) are in demand as AI datacenters scale. Astera guided Q3 revenue to $203–210M ^[21], implying continued double‑digit growth. (It expects EPS ~$0.38–0.39 for Q3 ^[22].) In the long run, BofA sees a $5B AI infrastructure market by 2030, and Astera aims to capitalize on that surge ^[23].

Analysts are divided on timing. Citi’s Atif Malik (Buy, $275 PT) remains enthusiastic, highlighting Astera’s role in open AI network ecosystems ^[24] ^[25]. Others are more cautious: Jefferies (Buy) raised its target to only $130, and a few firms have held or trimmed their ratings to Neutral/Hold, reflecting valuation risks ^[26]. However, the average 12‑month target (~$187) suggests material upside from current levels ^[27].

In context, the semiconductor/AI chip sector has been rallying (e.g. AMD jumped 24% on the OpenAI news ^[28]). Connectivity specialists like Astera trade on how these ecosystems evolve. With new partnerships (Arm, AMD, OCP Consortium) and its PCIe6 roadmap, Astera is positioning for the AI Infrastructure 2.0 transition. Investors will be watching its upcoming Nov 4 earnings for signs that growth can continue despite intensifying competition.

Sources: Astera Labs press releases and filings ^[29] ^[30]; market news (MarketBeat, TipRanks, GuruFocus) ^[31] ^[32] ^[33]; analyst reports (Citi, BofA) ^[34] ^[35]; sector context (Investopedia) ^[36] ^[37].

References

1. www.investing.com, 2. www.investing.com, 3. www.tipranks.com, 4. www.gurufocus.com, 5. www.tipranks.com, 6. finviz.com, 7. www.tipranks.com, 8. finviz.com, 9. finviz.com, 10. www.nasdaq.com, 11. www.nasdaq.com, 12. finviz.com, 13. www.nasdaq.com, 14. www.investopedia.com, 15. www.tipranks.com, 16. www.gurufocus.com, 17. www.nasdaq.com, 18. www.nasdaq.com, 19. www.marketbeat.com, 20. finviz.com, 21. finviz.com, 22. www.marketbeat.com, 23. finviz.com, 24. finviz.com, 25. finviz.com, 26. www.marketbeat.com, 27. www.tipranks.com, 28. www.investopedia.com, 29. www.nasdaq.com, 30. finviz.com, 31. www.tipranks.com, 32. finviz.com, 33. www.marketbeat.com, 34. finviz.com, 35. www.tipranks.com, 36. www.investopedia.com, 37. www.investopedia.com

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Marcin Frąckiewicz Latest posts

CEO of TS2 Space and founder of TS2.tech. Expert in satellites, telecommunications, and emerging technologies, covering trends in space, AI, and connectivity.

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