Astera Labs stock falls 13% despite Stifel reaffirming Buy rating

Investing.com - Astera Labs (NASDAQ:ALAB) stock dropped more than 13% in Tuesday’s trading session despite Stifel reiterating its Buy rating and $200.00 price target on the connectivity solutions provider.

The sell-off came after Amazon (NASDAQ:AMZN) announced at its AWS re:Invent conference on December 2, 2025, that it would partner with Nvidia (NASDAQ:NVDA) to integrate NVLink Fusion into Trainium 4 XPU deployments, as well as into its Graviton custom CPUs and Nitro networking chips. Amazon, currently trading near its InvestingPro Fair Value with a market capitalization of $2.51 trillion, has seen its shares gain nearly 10% over the past year while maintaining a "GREAT" overall financial health score.

On the same day, Astera Labs announced it was expanding its initial support for Nvidia’s NVLink ecosystem by actively collaborating with hyperscalers to support NVLink connectivity in their complex deployments across XPUs and GPUs, including leveraging its newly acquired photonic chiplet capabilities.

Stifel noted that investors appeared concerned that Astera’s switch opportunity might disappear in an NVLink environment following the AWS/Nvidia partnership announcement, which triggered the stock decline despite an initial morning increase.

The research firm characterized these fears as "misplaced," suggesting that Astera’s support for the NVLink ecosystem and more active role in hyperscaler custom designs should maintain "a continued solid content opportunity" for the company, with dollar content per XPU expected to increase with each sequential generation.

In other recent news, Amazon Web Services (AWS) has introduced AWS AI Factories at its re:Invent conference, providing dedicated AI infrastructure for deployment within customers’ data centers. This new offering integrates NVIDIA accelerated computing platforms, AWS Trainium chips, and AWS AI services, enabling organizations to utilize AWS technology while keeping data on-premises. Additionally, AWS unveiled three new frontier agents designed to transform software development, including the Kiro autonomous agent, AWS Security Agent, and AWS DevOps Agent, all aimed at enhancing development, security, and operational efficiency.

In a collaboration, Sony Group Corporation is leveraging AWS’s AI services to enhance its enterprise AI capabilities, focusing on boosting fan engagement through the Sony Engagement Platform. Analyst activity around Amazon also saw Wells Fargo raising its price target to $295, citing the company’s expectation to double AWS capacity by 2027, which could lead to revenue growth for the cloud business. Meanwhile, Citizens maintained its $300 price target, expressing concerns about the profitability of Amazon’s grocery business despite efforts to improve margins. These developments reflect ongoing strategic moves by Amazon and its subsidiaries to strengthen their market positions.

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