Astera Labs (ALAB +7.52%) is posting big gains Thursday. The connectivity-semiconductor company's share price was up 10.8% as of 2:45 p.m. ET, according to data from S&P Global Market Intelligence.
NASDAQ: ALAB
Key Data Points
While there isn't any business-specific news pushing Astera stock higher today, the company's valuation is getting a boost from Nvidia's (NVDA +4.83%) recent quarterly report. The graphics processing unit (GPU) leader reported better-than-expected Q2 results and forward guidance yesterday, and the results have helped to power gains for many other AI stocks today. But the results actually haven't been enough to spur gains for Nvidia, and the AI leader's share price is down 4.5% in the daily session, as of this writing.
Nvidia's Q2 report signals strong AI demand
AI-driven demand helped Nvidia's data-center segment revenue increase 154% year over year and reach $26.3 billion in the second quarter of the company's fiscal year, which ended July 28. The performance helped push overall revenue reach roughly $30 billion, up 122% year over year. With margins proving quite resilient, non-GAAP (generally accepted accounting principles) adjusted earnings per share rose 152% compared to the prior-year period.
Looking ahead to the current quarter, Nvidia guided for sales to come in at approximately $32.5 billion. For comparison, the average analyst estimate had targeted sales of $31.7 billion prior to the report.
With strong Q2 results and forward guidance, investors are seeing strong demand in the AI space and bidding up Astera Labs and other AI stocks in response. Astera's share price is likely also getting a boost due to commentary Nvidia shared about its upcoming Blackwell chips.
Is Nvidia's Blackwell set to be a bullish catalyst for Astera Labs stock?
In the investor conference call it hosted yesterday, Nvidia said that it expects production of its next-gen Blackwell processors to begin in this year's fourth quarter. While the market seems to be disappointed that the new chip platform will arrive a bit later than initially expected, investors appear to be bullish on what the production ramp will mean for Astera.
Some analysts and investors are betting that technologies from Astera will be included in Nvidia's upcoming GB200 processors. In Astera Labs' last quarterly conference call, CEO Jitendra Mohan said that "increasing average dollar content in next generation GPU-based AI platforms give us confidence in our ability to outperform industry growth rates." If the company has scored contract wins to support upcoming Blackwell processors at elevated selling prices, it likely has a major positive performance catalyst on the horizon.
