Astera Labs Sinks 14% After AMD Secures Major GPU Partnership With Oracle

Astera Labs (ALAB, Financials) shares fell AMD (AMD, Financials) revealed a new partnership with Oracle (ORCL, Financials) to deploy 50,000 GPUs starting in the second half of 2026.

The drop extends recent volatility for Astera Labs, which develops semiconductor-based connectivity solutions used in cloud and AI data centers. Investors see AMD's expanded cloud partnership as potentially reducing the need for Astera's PCIe interface products a concern similar to one raised last month when Intel and Nvidia announced a joint effort to integrate NVLink technology into data center systems.

Morgan Stanley analysts previously warned that NVLink's deeper integration into x86 systems could replace the traditional PCIe connection between the CPU and Nvidia GPU, which would directly affect Astera's core product demand.

Despite the sell-off, Astera emphasized its continued collaboration with AMD, noting its support for open standards such as PCIe, UALink, Ethernet, and Compute Express Link (CXL). AMD's director of AI technology said the companies' work on UALink connectivity would help customers deploy AMD Instinct GPUs at scale in open rack architectures.

Earlier this month, Bank of America began coverage of Astera Labs with a Neutral rating and a $230 price target, citing its strategic positioning in AI infrastructure despite valuation risks. The stock had gained 160% over the past year before today's decline.