Oracle Corporation's partnership with AMD has sparked concerns over PCIe replacements, leading to a sharp decline in the stock price of Astera Labs (ALAB.US).

According to a statement released on Tuesday, Oracle Corporation (ORCL.US) Cloud Infrastructure (OCI) will start deploying 50,000 AMD (AMD.US) upcoming MI450 AI chips in its data centers starting in the third quarter of 2026. It is reported that the MI450 is AMD's most advanced GPU 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), targeting NVIDIA Corporation's 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, dropped 19% on Tuesday. It is worth noting that Astera Labs' stock price also experienced a significant decline after Intel Corporation (INTC.US) and NVIDIA Corporation reached a joint development agreement for PC and data center chips last month. At that time, Morgan Stanley stated that Intel Corporation's collaboration with NVIDIA Corporation may have a significant impact on Astera Labs. Morgan Stanley stated at the time, "Market concerns that NVLink could expand into the x86 domain to potentially replace the traditional PCIe connection between x86 CPUs and NVIDIA Corporation GPUs could impact Astera Labs, as the company has a significant business focus in the PCIe domain." The new collaboration agreement between AMD and Oracle Corporation seems to reignite similar market concerns. However, Astera Labs released a statement on Monday showcasing 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 accelerator 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, balancing performance, efficiency, and flexibility." Earlier this month, Bank of America Corp began covering Astera Labs, giving the stock a "neutral" rating with a target price of $230, citing the company's potential to benefit from the growth in the AI market with its PCIe and UALink retimers and switch chips. However, Astera Labs' stock price has already accumulated a 160% increase in the past year, leading some analysts to believe that the stock is already overvalued.