Astera Labs (NASDAQ:ALAB) gained 7% in premarket trading Wednesday, clawing back part of Tuesday’s steep 13.5% slide after several analysts pushed back against concerns over the company’s positioning in NVIDIA’s NVLink ecosystem.
The sharp decline followed announcements at AWS re:Invent, where Amazon (NASDAQ:AMZN) revealed plans to integrate NVIDIA’s (NASDAQ:NVDA) NVLink Fusion technology into its upcoming Trainium 4 XPU systems. The update triggered worries that Astera Labs’ opportunity within the NVLink ecosystem could narrow.
Stifel analyst Tore Svanberg reaffirmed his Buy rating and $200 price target, arguing that fears were overblown. “We believe these fears are misplaced and would be acquirers of ALAB stock on weakness. ALAB’s support for the NVLink ecosystem and more active role in hyperscaler custom designs mean the company should have a continued solid content opportunity in NVLink Fusion designs across hyperscaler deployments,” Svanberg wrote.
Morgan Stanley analyst Joseph Moore echoed this view, reiterating an Overweight rating with a $210 target. He argued that the AWS announcement actually expands Astera’s potential market. “The stock sold off 13% on Tuesday because this NVLink adoption was viewed as unfavorable, while in our view the announcement is clearly an incremental positive,” Moore said.
On Tuesday, Astera Labs highlighted that it is deepening its involvement in the NVLink ecosystem, working closely with hyperscalers to enable NVLink connectivity across complex deployments involving XPUs and GPUs — signaling a more active and strategic role than before.