Does Astera’s Custom NVLink Push for Hyperscalers Reshape the Bull Case for Astera Labs (ALAB)?

• In early December 2025, Astera Labs announced plans to deliver custom connectivity solutions for next-generation AI infrastructure, building on its earlier entry into NVIDIA’s NVLink Fusion Ecosystem and targeting hyperscalers needing tailored, workload-specific performance, energy efficiency, and cost optimization.
• An important angle is how Astera Labs is pairing its standards-based Intelligent Connectivity Platform with custom NVLink-focused designs and photonic chiplet technology to support heterogeneous, rack-scale AI systems for large cloud providers.
• We’ll now examine how this push into custom NVLink-enabled connectivity for hyperscalers could reshape Astera Labs’ long-term investment narrative.

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Astera Labs Investment Narrative Recap

To own Astera Labs, you need to believe that hyperscalers will keep investing heavily in ever more complex AI infrastructure and that Astera can stay at the heart of that buildout. The new custom NVLink-focused connectivity push directly ties into the key short term catalyst of deeper hyperscaler engagement, while also sharpening the biggest risk: dependence on a concentrated set of large customers whose spending and architectural choices can change quickly.

The December 2025 custom connectivity announcement builds on Astera’s earlier move to join NVIDIA’s NVLink Fusion Ecosystem, which already positioned the company closer to high value AI rack deployments. By extending its Intelligent Connectivity Platform with photonic chiplets and workload specific NVLink designs, Astera is trying to increase its dollar content per rack and make its solutions harder to displace just as competition in AI switching and interconnects is intensifying.

Yet even as this opportunity expands, investors should be aware that Astera’s growing reliance on a small group of hyperscale buyers could...

Read the full narrative on Astera Labs (it's free!)

Astera Labs' narrative projects $1.5 billion revenue and $393.5 million earnings by 2028. This requires 34.1% yearly revenue growth and about a $293.3 million earnings increase from $100.2 million today.

Uncover how Astera Labs' forecasts yield a $198.32 fair value, a 30% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have published 28 fair value estimates for Astera Labs, ranging from US$17.11 to US$262.56. Against this wide spread of opinions, the company’s push into custom NVLink connectivity for hyperscalers could meaningfully influence how resilient its AI centric growth story appears over time, so it is worth comparing several of these views before deciding how the risk and reward balance looks to you.

Explore 28 other fair value estimates on Astera Labs - why the stock might be worth as much as 72% more than the current price!

Build Your Own Astera Labs Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Astera Labs research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Astera Labs research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Astera Labs' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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