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Investing.com - Astera Labs (NASDAQ:ALAB) stock is rebounding after a 13% drop following the announcement of a new partnership between Amazon and Nvidia for NVLink on Trainium4. For deeper insights into Astera Labs ’ financial health and valuation metrics, investors can access comprehensive analysis through InvestingPro.
The steep decline was described as "an over-reaction on fast money sellers and shorts" by Mizuho’s Klein, who noted that several sell-side analysts have defended the stock, stating the Nvidia deal is actually additive with higher dollar content potential for Astera Labs in Amazon’s new Trainium 4 ASIC currently in design for 2027.
Initial market concerns centered on whether the new partnership would reduce space and dollar content for Astera’s interconnect technologies, which are UALink and PCIe based, as Amazon opens its Trainium ASIC and stock to Nvidia’s high-speed interconnect platform.
Astera Labs management has reportedly addressed investor concerns, clarifying that UALink would remain a core option for Trainium 4, and while NVLink would be offered, Astera products could still be used in these designs without being blocked out.
The company is positioned to benefit from Amazon’s capital expenditure ramp and AI expansion, as well as AMD MI450 growth next year, with its retimers, fabric switch, and new scale-up Scorpio products currently ramping up production. InvestingPro subscribers can access detailed Fair Value estimates, financial health scores, and exclusive ProTips for Astera Labs among 1,400+ US equities with comprehensive Pro Research Reports.
In other recent news, Credo Technology Group has seen a series of positive developments. The company reported strong earnings for the October quarter, with revenue reaching $268 million and earnings per share of $0.67, surpassing consensus estimates. Credo also provided guidance for the January quarter, projecting revenue of $340 million, which is approximately 38% above the consensus estimate. Analysts have responded favorably to these results, with several firms, including TD Cowen, Roth/MKM, Needham, Mizuho, and Stifel, raising their price targets on Credo Technology. TD Cowen increased its target to $240, citing strong results and guidance, while Roth/MKM raised its target to $250, highlighting a broadening customer base. Needham noted the company’s Active Electrical Cable strength, raising its target to $220 and increasing its fiscal 2027 revenue estimate by $350 million. Mizuho and Stifel both set their price targets at $225, recognizing the company’s earnings beat and revenue growth. These developments underscore the positive momentum for Credo Technology in the market.
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