Astera Labs partners with NVIDIA for AI server deployment

SANTA CLARA, Calif. - Astera Labs Inc. (NASDAQ:ALAB), a semiconductor company specializing in connectivity solutions with a market capitalization of $11.68 billion and impressive revenue growth of 242% year-over-year, has announced the integration of its Scorpio Smart Fabric Switches with NVIDIA’s MGX platform, which is based on the NVIDIA Blackwell architecture. This collaboration aims to enhance the performance and scalability of AI servers, providing a modular design that is ready for PCIe 6 technology. According to InvestingPro data, the company maintains strong gross profit margins of 76%, positioning it well in the competitive semiconductor market.

Astera Labs’ Scorpio P-Series Fabric Switch is designed to integrate with NVIDIA’s Blackwell-based MGX platform, offering a solution that accelerates the deployment of AI systems and supports rapid scaling. The company’s accelerated test and interoperability development kit, which includes a range of resources such as whitepapers, SDKs, and simulation models, is available to customers for in-house testing.

Mike Hendricks, Associate VP at Astera Labs, emphasized the importance of flexible server platforms for the evolving AI infrastructure landscape, noting the Scorpio P-Series’ role in enabling rapid market entry and high performance for next-generation AI systems. While the company is currently not profitable, InvestingPro analysis indicates that analysts expect profitability this year, with 10 analysts recently revising their earnings estimates upward.

Industry analyst Patrick Moorhead from Moor Insights & Strategy highlighted the significance of NVIDIA’s Blackwell architecture and MGX platform for future data centers. He pointed out that Astera Labs’ modular connectivity solutions are crucial for meeting the demands of AI workloads.

The NVIDIA MGX platform is designed to help manufacturers build AI, HPC, and cloud servers efficiently by incorporating NVIDIA components. This integration facilitates optimized data ingest for NVIDIA Blackwell units and maximizes GPU utilization with secure and high-performance data flows.

Astera Labs also offers the COSMOS rack-scale management software, which provides observability, telemetry, and diagnostics for data centers, enhancing GPU utilization and uptime when used with Scorpio Smart Fabric Switches and Aries Smart DSP Retimers.

Andrew Bell, NVIDIA’s vice president of hardware engineering, and Robert Lin, President of Wistron’s Enterprise & Networking Business Group, both acknowledged the collaboration’s potential to improve AI infrastructure efficiency and reliability.

Astera Labs will showcase its PCIe 6-ready NVIDIA MGX platform featuring the Scorpio P-Series at NVIDIA GTC 2025, from Sunday to Wednesday, at the San Jose Convention Center.

This announcement is based on a press release statement from Astera Labs.

In other recent news, Astera Labs has been the focus of several analyst reports and financial updates. The company reported impressive fourth-quarter results for 2024, with revenue surpassing Stifel’s estimates by 10.2% and achieving a 242.2% year-over-year growth, reaching $396.3 million. Looking ahead, Astera Labs forecasts first-quarter 2025 revenues to exceed Stifel’s estimates by 16.0%, projecting a 66.0% year-over-year growth for 2025. Jefferies reiterated a Buy rating with an $85 target, noting strong December earnings but expressing concerns over a softer gross margin mix and increased operating expenses. Meanwhile, Needham maintained its Buy rating with a $140 target, citing robust sales of Taurus and Aries product lines as key contributors to the company’s financial success.

Raymond James initiated coverage on Astera Labs with an Outperform rating and an $82 price target, emphasizing the company’s strong positioning in the GenAI megatrend and the potential for 25-30% growth. The report highlighted Astera Labs as a leading supplier in the PCIe retimer market and noted its progress in the Active Electrical Cable market. Analysts also pointed to the company’s involvement in custom ASICs as a significant opportunity for content expansion. Stifel analysts maintained a Buy rating with a $150 target, underscoring the company’s strong performance and diverse product segments. These developments reflect a positive outlook for Astera Labs, driven by its strategic product offerings and market positioning.

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