AMD's Big Oracle Deal Sends Shockwaves Through AI Chipmaker Astera Labs

Oct 15 - Astera Labs ALAB fell about 19% on Tuesday after AMD (AMD) and Oracle ORCL disclosed a plan to deploy 50,000 GPUs beginning in the second half of 2026.

The partnership adds to competitive pressure on Astera Labs, which supplies connectivity semiconductors used in cloud and AI servers. Analysts said the agreement may reduce near-term demand for traditional PCIe-based links, a key segment for the company.

Market watchers recalled similar worries last month when Morgan Stanley said Intel's (INTC) collaboration with Nvidia NVDA could reshape chip-to-GPU communication and weigh on Astera's content share in AI platforms.

Astera on Monday highlighted its new suite of AI infrastructure products built on PCIe, CXL, Ethernet, and UALink standards. AMD said the work supports open rack architectures for large-scale GPU deployment.

Earlier in October, Bank of America began coverage of Astera Labs with a Neutral rating and a $230 price target, noting its exposure to expanding AI connectivity markets despite rising competition.