Astera Labs went public, showing promise with strong financials and AI potential with Nvidia partnership

From Nasdaq: 2024-06-27 09:49:30

Astera Labs (ALAB) went public in March 2024, soaring 72% in its trading debut, with a market cap of $9 billion. The fabless semiconductor company offers connectivity solutions for data-centric systems, partnering with major tech companies like Nvidia, AMD, and Intel to fuel AI growth.

Astera Labs caught the eye of investors due to its AI potential, with its products likely to be featured in future Nvidia offerings. The stock currently trades 37% below its all-time high, presenting a buying opportunity for those interested in the semiconductor sector.

Amazon owns a stake in Astera Labs through a deal dating back to 2019. The e-commerce giant has the option to purchase up to 1.5 million shares of Astera, with an additional 830,000 shares added in 2023. Amazon holds 232,608 Astera shares, valued at $134.47 million.

In Q1 of 2024, Astera Labs reported impressive financials, with revenue reaching $65.3 million, a 269% increase year over year. The company’s CEO anticipates sustained growth as hyperscalers invest in AI infrastructure, driving a multi-year growth cycle for the business.

Analysts forecast Astera Labs to double sales to $304 million in 2024, with adjusted earnings per share at $0.44. The stock trades at a premium multiple compared to peers, with a target price of $87.91, suggesting a potential 58.1% upside from current levels.



Read more at Nasdaq: Is Astera Labs Stock a Buy for Potential Nvidia Upside?