Astera Labs (NASDAQ: ALAB), a key supplier of technology for AI data centers, saw its shares rise by 7.8% as of 1:33 p.m. ET on Tuesday following Amazon’s expanded partnership with AI firm Anthropic. On Monday, Anthropic committed over $100 billion over ten years to utilize Amazon’s Trainium processor chips, with Amazon investing $5 billion in the AI company—a figure that could rise by an additional $20 billion in the future.
Analysts project significant revenue growth for Astera Labs as Amazon plans to implement Astera’s technology in its AI infrastructure. J.P. Morgan’s Harlan Sur expects Amazon to utilize Astera’s P-series switches and PCIe retimer technology for Trainium 2 chips, while RBC Capital increased its price target for Astera Labs from $225 to $250, forecasting revenue from Astera’s Scorpio switches to grow from $130 million in 2025 to $390 million in 2026.
Despite this positive outlook, investors should approach with caution due to Astera Labs’ history of volatility and a high valuation, currently priced at over 50 times the consensus earnings per share for next year of $3.53.
