Marvell, Astera Labs Shares Rise on Amazon's $25 Billion AI Chip Business

Shares of Marvell Technology and Astera Labs gained in pre-market trading Friday after a key customer, Amazon, revealed its custom artificial intelligence and chip operations have reached a $25 billion annual run rate.

Market Reaction

According to pre-market data, Marvell Technology (NASDAQ:MRVL) shares rose 7%, while Astera Labs (NASDAQ:ALAB) saw its stock increase by 8%. The rally followed Amazon's latest earnings report, which highlighted new milestones for its in-house chip business.

Amazon Web Services (AWS) reported its fifth consecutive quarter of cloud sales growth and disclosed for the first time that its custom chips are now powering $25 billion in annual sales. This figure provides a concrete measure of the scale of Amazon's investment in its own AI infrastructure.

Cloud Spending Drives Chip Demand

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The market response reflects growing investor confidence in the suppliers that support the expansion of major cloud providers. As companies like Amazon invest heavily in capital expenditures for AI, the demand for specialized components, including networking chips and other integrated circuits, is expected to increase.

According to Bloomberg Intelligence, the capital expenditure plans announced by major tech companies like Amazon and Alphabet are increasing the likelihood of upside to consensus forecasts for computing and networking chipmakers through 2026-27. The firm noted that the AWS disclosure directly supports the outlook for application-specific integrated-circuit (ASIC) and networking-chip providers.

Companies like Marvell, Astera Labs, and Broadcom are seen as key beneficiaries of this trend, as they have significant exposure to infrastructure spending at these major cloud customers.