Astera Labs rises after Northland upgrade on expectations of prolonged AI spending cycle

Northland noted that heavy reliance on a limited number of end customers, supply chain dependency and general semiconductor industry cyclicality could be risks to Astera Labs.

LSEG data showed 16 of 23 brokerages rate the stock buy or higher and seven hold, with a median price target of $425. As of the last close, the stock was up 93.3% year to date.

The brokerage also said Astera Labs is well-positioned in signal conditioning for AI infrastructure.

It added that it expects the $200 billion AI infrastructure funding for Anthropic backed by Google GOOGL.O, Broadcom AVGO.O and others, and Nvidia's NVDA.O plan for $500 billion in private capital with other partners, will push peak AI spending out into 2027.

Semiconductor connectivity firm Astera Labs' shares ALAB.O rose 5.7% to $339.81 in premarket trading after brokerage Northland Capital raised the rating on the stock to outperform from market perform.

Northland said it expects further positive earnings revisions and a longer-than-expected AI infrastructure spending cycle, with the company's content per server rack continuing to increase.