Semiconductor stocks with exposure to artificial intelligence infrastructure rallied on Tuesday, driven by growing Wall Street conviction that AI inference workloads will become the next major growth catalyst. Astera Labs (ALAB) surged more than 16%, while Intel (INTC) snapped a five-day losing streak with a gain of over 2%, as analysts raised price targets and highlighted improving prospects for server connectivity and CPU demand.
Astera Labs rides inference wave
Shares of Astera Labs peaked at $255.96 before settling near $251.28 after Evercore ISI lifted its price target to $297 from $215, citing expectations that hyperscale cloud providers will shift spending toward cost-efficient inference. CEO Jitendra Mohan emphasized the company’s role as the “Switzerland of connectivity,” supporting both GPU and custom ASIC platforms. Astera’s revenue has skyrocketed from $65 million at its March 2024 IPO to $308 million in the latest quarter, with the Scorpio fabric switch family becoming its fastest-growing product line. However, customer concentration remains a risk, with over 70% of projected 2025 revenue tied to a single client.
Intel rebounds on server CPU optimism
Intel’s recovery came after Melius Research raised its price target to a Street-high $150, and Citi increased its own to $130, forecasting the server CPU market could reach $132 billion by 2030. Analysts argued that inference and agentic AI workloads will require significantly more CPUs, benefiting Intel’s data center business. The company is also pushing adoption of its 18A manufacturing node amid supply tightness on older Intel 7 products, a transition that could bolster its competitive positioning. Despite this, Intel faces persistent market share erosion—its server CPU share slipped to 54.9% in the first quarter, according to UBS—leaving Wall Street with a consensus Hold rating.
