Amazon is set to benefit from the buzzy IPO after signing warrant agreements that allow it to buy about 2.3 million shares of Astera.artificial intelligence boom, which sells data center connectivity chips to cloud and AI infrastructure companies, soared 72% in their Nasdaq debut, closing at $62.03. That gives Astera a market cap of close to $9.5 billion., when it struck a deal with Amazon that gave the tech giant warrants allowing it to buy up to 1.5 million shares of Astera's stock at $20.
Based on Wednesday's closing price, Amazon's shares and warrants are worth a total of almost $144 million. But in order for Amazon to vest the rest of its shares and fully benefit from the price pop, it must purchase up to $650 million worth of Astera's products in the coming years, according to the agreement. That's a lot of money for Astera, which recorded total sales last year of $115.8 million, up from $79.9 million in 2022.
The three types of products Amazon has agreed to buy are are all designed to address "critical bottlenecks in AI infrastructure," according to Astera's IPO prospectus. Astera is joining the public markets as investors eagerly await social media company Reddit's planned New York Stock Exchange
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