Oracle and AMD collaboration raises concerns over PCIe alternatives, Astera Labs stock price plummets

According to a statement released on Tuesday, Oracle (ORCL.US) will deploy 50,000 upcoming MI450 AI chips from AMD (AMD.US) in its data centers starting in the third quarter of 2026. The MI450 is AMD's most advanced GPU (graphics processing unit) to date and will be integrated into the company's self-developed Helios server rack system, combined with AMD's self-developed central processing unit (CPU), directly targeting NVIDIA's (NVDA.US) next-generation "Vera Rubin" series AI chips. However, following this news, Astera Labs (ALAB.US), which focuses on designing and manufacturing semiconductor-based connectivity solutions for cloud computing and AI infrastructure, saw its stock drop 19% on Tuesday. Notably, when Intel (INTC.US) and NVIDIA reached a joint development agreement for PC and data center chips last month, Astera Labs' stock also experienced a significant decline. Morgan Stanley stated at the time that the collaboration between Intel and NVIDIA could have a significant impact on Astera Labs. Morgan Stanley noted, "The market is concerned that NVLink's expansion into the x86 domain may replace the traditional PCIe connection between x86 CPUs and NVIDIA GPUs, which would affect Astera Labs, as the company has a large business share in the PCIe field." The new collaboration agreement between AMD and Oracle seems to have reignited similar market concerns. However, Astera Labs announced on Monday that it showcased its connectivity solutions for AI infrastructure, compatible with standards such as PCIe, UALink, Ethernet, CXL, and OpenBMC. The Director of AI Technology and Ecosystem at AMD stated, "The future of AI infrastructure depends on an open ecosystem that allows customers to choose the best AI accelerators for their specific workloads. Our collaboration with Astera Labs on UALink connectivity ensures that customers from both sides can deploy AMD Instinct GPUs at scale in an open rack architecture, achieving a balance of performance, energy efficiency, and flexibility." Earlier this month, Bank of America began coverage of Astera Labs, giving the stock a "neutral" rating with a target price of $230, citing the company's potential to benefit from growth in the AI market through its PCIe and UALink retimer and switch chips. However, Astera Labs' stock has risen 160% over the past year, leading some analysts to believe that the stock's valuation is already too high