Nvidia rose only 0.8% on September 4, while Astera Labs jumped 9.8% and Marvell gained 7.1%. The comparison was consistent with investors broadening the AI trade beyond accelerators into connectivity suppliers. Astera’s rally also coincided with speculation that the company could be added to the S&P 500, although it was ultimately not selected in the September rebalance. Bigger accelerator clusters need retimers, switches, optical links, and custom silicon to move data without leaving expensive processors idle. Astera Labs, Inc. (NASDAQ:ALAB) and Marvell Technology, Inc. (NASDAQ:MRVL) monetize that connectivity bottleneck from different positions.
Photo from Astera Labs
Astera is the focused rack-scale connectivity play. Its second-quarter update said a Q3 production ramp of the Scorpio X-Series 320-lane fabric switch was expected to drive the next revenue inflection, alongside growth opportunities across Aries, Taurus, and Leo. The bull case is content growth: each new generation of AI rack can require more connectivity silicon and software. The bear case is dependence on a concentrated group of hyperscale customers, product-transition timing, and a valuation that assumes strong adoption before every design win becomes revenue.
Hedge-fund breadth strengthened before the rally. Insider Monkey counted 73 funds holding Astera Labs, Inc. at June 30, up from 53 at March 31. Lee Ainslie’s Maverick Capital disclosed 1,067,215 shares, 12% more than in Q1. The quarter-end filing cannot show whether Maverick participated in the September move.
Marvell is more diversified. Its data-center business spans custom compute, electro-optics, switching, and interconnect, giving it multiple ways to benefit as cloud companies redesign AI systems. That breadth is the bull case because one customer’s architecture can pull several product families. It is also the risk: custom programs can be lumpy, development costs arrive before revenue, and investors may overestimate the near-term contribution of announced wins.
Insider Monkey’s count for Marvell Technology, Inc. increased to 96 hedge funds in Q2 from 79 in Q1. D. E. Shaw disclosed 2,504,623 shares, up 658% sequentially. Large percentage changes can begin from small bases, so the share count matters more than the headline percentage.
Astera’s August 14 exchange-reported short-interest snapshot showed 8,753,228 shares sold short, with 1.85 days to cover. Short interest had fallen 3.9% from the prior settlement, which weakens a pure short-squeeze explanation. Astera provides higher operational torque to rack connectivity, while Marvell offers a broader product portfolio.
For both, the decisive evidence will be production revenue, customer diversification, and gross margins as networking standards and optical architectures change. Design-win announcements are leading indicators, not booked sales, and both companies must keep pace as customers pursue competing interconnect standards. Investors should also track revenue concentration and inventory, since faster component launches can conceal slower adoption by the next customer tier.
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