The centre-forward has signed a contract with Elche that will keep him at the club until 2029.
Álvaro, a 21-year-old Uruguay international, made his senior debut for Real Madrid during the 2022/23 season under former coach Carlo Ancelotti.
Elche has praised Álvaro's skills, highlighting his impressive physical strength, good aerial play, and ability to link up with his teammates.
The club believes Álvaro's arrival will strengthen their attacking lineup and further demonstrate their commitment to developing young and promising players.
