By Hannah Pedone
Investors seem pleased by the connectivity company's firm timeline for a new switch and its talk of revenue opportunities in optical networking
Shares of Astera Labs closed up 13% on Tuesday.
Astera Labs excited investors in a big way on Tuesday as management talked up its opportunity in the red-hot optical arena and offered more visibility into the timeline for a key networking switch.
Shares of Astera Labs (ALAB), which makes connectivity products, closed up 13% on Tuesday after executives delivered upbeat commentary at J.P. Morgan's Technology, Media and Communications Conference.
Stifel analyst Tore Svanberg told MarketWatch that investors seemed pleased that the company gave a firm timeline on the ramp of its Scorpio X fabric switches, a type of networking hardware used in data centers. Astera Labs CEO Jitendra Mohan said Scorpio X will be the company's largest product by the end of the year.
That comes alongside the ramp of NVLink Fusion, which will see Astera Labs partner with Nvidia (NVDA) to sell its hardware for AI clusters.
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Svanberg also thinks investors liked hearing about the company's future potential in optical networking. Management said that the optical space offers a multibillion-dollar opportunity, which would come on top of its existing connectivity business.
The company will offer two types of optical solutions for customers - co-packaged and near-packaged optics - based on customer needs. In the former, optical components are co-packaged with graphics processing units. The company expects to see revenue from near-packaged optical components as soon as 2027.
Finally, Svanberg pointed out that Astera Labs signaled it has more demand for its custom products than it has resources to meet customers' interest - a positive sign for the company.
&#34;All in all, very, very happy with where we are... we are not shy about investing to make sure that we secure our place in the future,&#34; Mohan said.
Astera Labs earlier this month impressed investors with an earnings beat and the announcement of its new chip, the Scorpio X-Series 320 Lane Smart Fabric Switch. The stock is up 36% so far this year.
See also: Is Nvidia spending its cash on the right things? Investors will soon get an update.
-Hannah Pedone
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(END) Dow Jones Newswires
05-19-26 1731ET

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Astera Labs' stock surged 13% following positive commentary at J.P. Morgan's conference, highlighting a firm timeline for its Scorpio X fabric switches and revenue potential in optical networking. Analysts noted strong investor interest in the company's future opportunities, with expectations for revenue from optical solutions by 2027. The stock has risen 36% this year, reflecting strong demand for its products and a positive outlook from management.

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JPMORGAN CHASE & CO. 4.20% DEP SHS REPSTG 1/400TH PFD SER MM

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Here's why Astera Labs' stock just staged a big gain