Investing.com -- Northland Capital Markets downgraded Intel and Astera Labs to Market Perform on Tuesday, citing stretched valuations and growing concerns that hyperscaler spending on artificial intelligence infrastructure will decline in 2027.

In notes covering both companies, Northland said it is modeling overall datacenter spending to fall in calendar year 2027 as hyperscalers become "increasingly cash-strapped."

Since the start of last year, hyperscalers have raised $260 billion in debt, while buybacks are said to have collapsed in the most recent quarter.

On Intel, Northland acknowledged the company is "making measurable progress in its turnaround" and expects estimates to rise as demand for server CPUs picks up.

However, even assuming Intel's datacenter business grows 40% in 2027, the firm said shares remain expensive at 38 times its out-year estimate of $3.20. Northland suspended its price target on the stock.

On Astera Labs, Northland expects estimates to increase over the next couple of quarters as its Scorpio-X product ramps, but said its prior $225 price target, based on 45 times its calendar year 2028 estimate of $5.00, is no longer justified at current levels.

The firm said achieving $5.00 in earnings in 2028 "is achievable, but not a slam dunk."