Oklo stock tumbles as Financial Times scrutinizes valuation
Investing.com - Barclays downgraded Astera Labs (NASDAQ:ALAB) from Overweight to Equalweight on Monday, while maintaining a price target of $155.00. According to InvestingPro data, the stock currently trades at a P/E ratio of 263x and has seen a significant -20% decline over the past week, despite maintaining strong revenue growth of 164% in the last twelve months.
The downgrade reflects concerns about Astera Labs’ ongoing revenue transition, as the company’s core retiming business is being replaced by Scorpio switch revenue from Amazon.
Barclays noted that following the Trainium 3 product cycle, where Astera will have "an excellent content profile," the firm does not see a backfill for the retiming revenue stream.
The investment bank expressed doubt about Astera Labs securing additional material PCIe or UAL scale-up wins in the future, suggesting limited growth avenues beyond current projects.
Recent announcements in scale-up architecture have increased Barclays’ confidence that industry trends are moving away from Astera Labs’ offerings, prompting the rating change despite the stock’s strong performance since its initial public offering.
In other recent news, Astera Labs has seen a series of analyst updates and strategic moves that are noteworthy for investors. The company is expected to provide a December quarter outlook that surpasses current estimates, with a forecasted revenue of $214.8 million, which would represent a 4.0% increase from the previous quarter. Stifel has raised its price target for Astera Labs to $185, maintaining a Buy rating, while Evercore ISI has significantly increased its target to $215, citing the company’s strong performance in the AI product cycle. Additionally, BofA Securities initiated coverage with a Neutral rating and a $230 price target, highlighting the company’s role in AI connectivity solutions.
Astera Labs has also joined the Arm Total Design ecosystem, aiming to advance chiplet solutions for AI infrastructure. This collaboration is expected to enhance the company’s Intelligent Connectivity Platform by integrating it with Arm’s Neoverse Compute Subsystems. Furthermore, Stifel has reiterated its Buy rating, emphasizing Astera Labs’ effective supply chain management, particularly in relation to Taiwan Semiconductor Manufacturing Company’s advanced nodes. These developments point to Astera Labs’ strategic positioning in the semiconductor industry.
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