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Investing.com - Morgan Stanley (NYSE:MS) has raised its price target on Astera Labs (NASDAQ:ALAB) to $125.00 from $99.00 while maintaining an Overweight rating on the stock. The company, currently trading at $118.41, shows impressive financial metrics with a 75.76% gross profit margin and remarkable revenue growth of 200% in the last twelve months. According to InvestingPro analysis, the stock appears overvalued at current levels.
The firm increased its 2026 sales multiple from 18x to 23x, based on projected revenue of $939 million for the semiconductor connectivity solutions provider.
Morgan Stanley expects Astera Labs to trade at a premium compared to other major networking companies due to what it describes as "unique AI exposure."
The research firm expressed confidence that spending in the artificial intelligence sector will continue, providing ongoing growth opportunities for Astera Labs.
Morgan Stanley also noted that Astera’s new products ramping up should help the company maintain sustained growth in the coming periods.
In other recent news, Astera Labs has garnered attention from several analysts, with a mix of upgrades and downgrades. Stifel raised its price target for Astera Labs to $110, citing potential for the company to surpass its $172.5 million revenue estimate for the June quarter due to strong growth in its Aries retimers and new Smart Gearbox. Meanwhile, Craig-Hallum increased its price target to $120, highlighting the impact of the Scorpio switch family on Astera Labs’ market position and growth potential. In contrast, Northland downgraded the stock from Outperform to Market Perform, expressing concerns about its valuation despite a projected 50% compound annual growth rate through 2028.
Evercore ISI also adjusted its outlook, raising its price target to $104 and maintaining an Outperform rating, following a presentation by Astera Labs’ executive team. The analysts from Evercore ISI suggested that the company’s focus on expanding its product range for rack-scale artificial intelligence could result in financial projections being too conservative. Additionally, William Blair initiated coverage on Astera Labs with an Outperform rating, emphasizing the company’s leadership in connectivity silicon for AI applications and its growing market share. These developments highlight a range of perspectives on Astera Labs’ growth trajectory and valuation among analysts.
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