ALAB Stock Rocketed 60% This Month – Why Does This Analyst See A Further 43% Upside?

• RBC’s analyst Srini Pajjuri said the deal is a strong positive for AWS suppliers like Astera Labs and boosts confidence in 2027 estimates.
• UBS said it is constructive on the company’s growth prospects over the next three years.
• The firm added that Astera’s future growth will rely on competing in a more challenging switching market.

Shares of Astera Labs, Inc. (ALAB) surged more than 8% on Tuesday, extending a sharp rally that has lifted the stock more than 60% in April, following upbeat analyst commentary on suppliers tied to Amazon after the company’s deal with Anthropic.

ALAB shares have declined in just two sessions so far this April and are on track to post their biggest-ever monthly gains.

Amazon-Anthropic Deal To Boost Astera Stock

RBC Capital raised the price target on Astera Labs to $250 from $225 and maintained an ‘Outperform’ rating, according to The Fly. This represents a 43% upside potential to the stock’s closing price on Monday. 

The upgrade comes after Amazon (AMZN) and Anthropic struck a deal under which Anthropic will secure up to 5 GW of Amazon’s Trainium chips to train and run its advanced AI models. Its Claude platform will also be available on AWS. 

Separately, Amazon will invest $5 billion in Anthropic, with the potential to invest up to an additional $20 billion. 

RBC’s analyst Srini Pajjuri said the announcement is a strong positive for AWS suppliers like Astera Labs and boosts confidence in 2027 estimates and longer-term growth prospects.

UBS Sees Growth Prospects Over Next Three Years

UBS, which initiated coverage of ALAB with a ‘Neutral’ rating and price target of $180, said it is constructive on the company’s growth prospects over the next three years, according to The Fly. The firm added that Astera Labs has quickly become a credible player in AI networking, helped by strong execution in retimers, a type of mixed-signal semiconductor device, and by expanding beyond its initial customer base.

Astera, which makes high-speed connectivity solutions for data centers and AI solutions, counts Amazon, Nvidia, TSMC, and AMD among its key customers.

However, UBS said future growth will depend on competing in a more challenging switching market, even as the stock already trades at a premium to its AI networking peers.

How Did Retail Traders React?

Retail sentiment on Stocktwits remained ‘bullish,’ even as message volumes on the platform surged 1,200% over a 24-hour period.

One user expects the company’s market cap to double by the end of the year. It is currently around $30 billion.

Year to date, the stock has gained a little more than 7%.

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