Investing.com -- Astera Labs (NASDAQ:ALAB) stock rose 7% in pre-market trading Wednesday, partially recovering from Tuesday’s 13.5% decline after analysts defended the company’s position in the NVLink ecosystem.
The stock tumbled Tuesday following AWS re:Invent announcements about Amazon (NASDAQ:AMZN) partnering with NVIDIA (NASDAQ:NVDA) to integrate NVLink Fusion into its Trainium 4 XPU deployments, which sparked investor concerns about Astera’s market position.
Stifel analyst Tore Svanberg maintained a Buy rating and $200 price target on Astera Labs, addressing market fears. "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 noted.
Similarly, Morgan Stanley analyst Joseph Moore reiterated an Overweight rating with a $210 price target, explaining that Tuesday’s announcement actually expands Astera’s addressable 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 commented.
Astera Labs announced yesterday it was building on its initial NVLink ecosystem support by collaborating with hyperscalers to support NVLink connectivity in complex deployments across XPUs and GPUs, taking a more active role in the ecosystem.
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